Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TRADE

USSR (Credit)

Mr. Blaker: asked the Secretary of State for Trade how much of the Anglo-Soviet line of credit of £950 million arranged in 1975 has been taken up at the lastest available date; and if he will make a statement.

Mr. Hooley: asked the Secretary of State for Trade what major contracts have been secured by British companies for the supply of goods or equipment to the USSR under the £1,000 million line of credit negotiated in 1975; and what is the aggregate total value of these contracts.

The Secretary of State for Trade (Mr. Edmund Dell): Signed contracts concluded within the terms of the Anglo-Soviet Agreement in 1975 total £188 million. Other major contracts are under negotiation and I have every expectation that more contracts will be concluded. It is not customary to identify the contracts placed under this agreement.

Mr. Blaker: Is the Secretary of State aware that the distinguished Soviet exile Andrei Amalrik has made the point that, by transferring resources to the Soviet Union by means of generous credits of this kind, the West is helping the Soviet Union to maintain its police State?

Mr. Dell: We are simply competing with credits given by other Western countries. It is necessary to do so if we are to get business with the Soviet Union, and it is our wish to build up trade with the Soviet Union. That seems to us to be the right objective.

Mr. Hooley: Is my right hon Friend aware that these figures show how important trade is with the Soviet Union and how many jobs depend on the expansion and development of that trade?

Mr. Dell: It is certainly true that many jobs depend on this trade. I must say, however, that I am disappointed about the speed with which trade under this agreement is being negotiated and I shall certainly look for a considerable improvement over the next few months.

Mr. Churchill: Can the Secretary of State confirm that not one penny of profit will accrue to Britain under any contract placed as a result of this line of credit? Furthermore, can he deny that approximately 50 per cent. of the total production costs of anything that the Soviets purchase under this agreement will be footed by the British taxpayer?

Mr. Dell: I cannot confirm either of the facts which the hon. Gentleman suggests. These contracts bring employment to this country, and I do not think that the firms concerned will enter into them if they do not think it worth while to do so.

Mr. James Lamond: Is my right hon. Friend's wish for an improvement in this position likely to materialise now that the most recent five-year programme in the Soviet Union has started? Is it not necessary for us to make it as easy for our industrialists to sell things to the Soviet Union as other countries in Europe are doing, in an effort to build up trade and friendship with the Soviet Union?

Mr. Dell: I am sure that it is necessary, if we are to get business with the Soviet Union, for us to grant competitive credit terms. I hope that my hon. Friend is right in suggesting that perhaps further business will be coming under the five-year plan. Certainly we shall look for further business. We were assured by Mr. Gromyko last year that it was the intention of the Soviet Government to put business up to the limit of this agreement, and we are disappointed that nothing like that has yet been achieved.

Export Promotion

Mr. Frank Allaun: asked the Secretary of State for Trade if he will expand


the governmental export promotion sales organisation and staff.

Mr. Dell: The export promotion organisation of my Department is adjusted, when necessary, in consultation with the British Overseas Trade Board, which advises me on the resources needed to provide appropriate services and promotional aids for exporters.

Mr. Allaun: Will my right hon. Friend and the Secretary of State for Defence switch the 390-strong Defence Sales Organisation to promoting non-military engineering and other exports? Will my right hon. Friend take into consideration the policy of President Carter that commercial matters should not be the only grounds for considering exports but that peace should also be taken into account, since war would cost us far more than the loss of a few arms orders?

Mr. Dell: As my hon. Friend knows, defence sales are under the control of the Defence Sales Organisation and my right hon. Friend the Secretary of State for Defence. Non-military exports, on the other hand, are sponsored by my Department, and I will consider the resources that are necessary for assisting these exports in accordance with our judgment of the requirements. As I say, we shall adjust the resources devoted when we think it necessary.

Mr. Michael Morris: Is the Secretary of State aware of the grave dissatisfaction of exporters with the recent changes in the policy of the British Overseas Trade Board with regard to joint venture schemes in outward bound missions? Will he have another look at these changes? In any case, is it not time now, Wednesday aside, for publication and review of all our export services?

Mr. Dell: The hon. Gentleman knows that a review is going on of many matters in that area. As for the grave dissatisfaction of exporters, the British Overseas Trade Board was asked by me to make certain savings in connection with the public expenditure cuts last year, and it assured me that it could do so without affecting the main thrust of its activities. I do not think it should be asumed that all expenditure in promoting exports is cost-effective. We give far more assistance in joint ventures and overseas trade fairs than the great majority of our main

industrial competitors. I am satisfied that we are giving the help that is required.

Import Controls

Mr. Anthony Grant: asked the Secretary of State for Trade which industries he is considering to subject to selective import controls.

Mr. Dell: The Government are ready to use temporary selective import controls to protect any normally viable industry which is suffering serious injury as a result of increased imports.

Mr. Grant: Assuming for a moment that the Government continue in office, will the right hon. Gentleman beware that in any protectionist war foreign competitors carry a much bigger clout than we do? In particular, is the right hon. Gentleman aware that in the paper industry there are three important lines of imports which British producers cannot produce in sufficient quantities? Will he remember the interests of the consumer in all this?

Mr. Dell: The interest of the consumer is one matter that has to be considered. The Government have made public their position on import controls. Our policy is well known, it has been discussed in the House repeatedly, and I have no change to announce today.

Mr. John Garrett: Does my right hon. Friend agree that the hardest hit of all industries, by foreign countries, and the fastest declining, is footwear, and that the industry has every right to expect greater protection against foreign countries than it has had so far?

Mr. Dell: We control imports of footwear from Eastern Europe, and we have duties on, for example, Brazilian footwear. I am aware of the problems of the footwear industry, and we have taken action to give it protection. On the other hand, in our relations with Eastern Europe there are other considerations that have to be taken into account, and one is our exports to those countries.

Mr. William Shelton: Is the right hon. Gentleman satisfied with the criteria by which dumping is established, and is he happy with the proposed transfer to Europe in the next month or two of responsibility for anti-dumping regulations?

Mr. Dell: The criteria for dumping are laid down both in our own legislation and in the GATT anti-dumping code. We have been using that legislation more rapidly and more effectively in recent months than ever before, and I think that there have been some expressions of satisfaction from industry on that account.
As for the transfer of responsibility on 1st July to the European Commission, the House knows that last year I discussed this matter with Sir Christopher Soames, and more recently I discussed it again with Vice-President Haferkamp to make sure that they are aware of the need to build up staff in Brussels to handle the case load that they will face when the transfer takes place. It is the intention to maintain a unit in my Department to assist in the investigation of anti-dumping cases.

Mr. Ronald Atkins: Is my right hon. Friend aware that the Department of Applied Economics at Cambridge has again come out in favour of selective import controls as a safeguard in a necessary expansion of the economy, which is the only way to prevent unemployment rising to more than 2 million?

Mr. Dell: Although the department has kindly sent me a copy of its report, I have not yet had an opportunity of reading it in full. My impression is that, unlike my hon. Friend, it wants not selective import controls but general import controls. I think that would involve dangers, to which attention has been drawn on many occasions. If the forecasters, including those forecasters, are right in suggesting that this country will shortly be moving into a balance of payments surplus, it will make it even more difficult to use the sort of policy instrument recommended by Cambridge.

England and Scotland

Mr. Crawford: asked the Secretary of State for Trade if, following the work being done by the Scottish Council Research Institute on the input-output model of the Scottish economy, he will re-examine the feasibility of his Department's conducting a survey into the value of cross-border trade, including food and drink, between England and Scotland.

The Under-Secretary of State for Trade (Mr. Michael Meacher): No, Sir. The Department of Industry is already sponsoring a research project which is concerned with assessing the merits of alternative methods of estimating trade flows between different areas in the United Kingdom, including those between Scotland and England. The suggested survey would still entail substantial official costs on top of additional commercial costs which we do not think would be justified.

Mr. Crawford: Does not the Minister's reluctance to initiate such a study show that he and his Department are frightened of the possible results, and that they do not wish the people of Scotland to know that Scotland's trade is basically in balance, unlike England's?

Mr. Meacher: I take it that the evidence on which the hon. Gentleman purports to make his case that Scotland is in balance is drawn from an article by Michael Fry which appeared in the Scotsman on 14th February, which suggested that the preliminary results of the Scottish Council Research Institute's input-output project suggested that Scotland was in balance in 1973. The directors of the project said afterwards that the article was based on incomplete data, which was subsequently misinterpreted. There is, therefore, nothing in the hon. Gentleman's case to answer.

Mr. Canavan: Is it not true that cross-border trade in drink has been greatly improved by the bevy of SNP Members in this House?

Mr. Meacher: I am sure that members of the SNP have made their contribution to the £300 million or more earnings from Scotch whisky.

Mr. Alexander Fletcher: Is the hon. Gentleman aware that this is part of the SNP's campaign to create physical barriers between Scotland and 'England, including Customs posts and other impediments to the free movement of capital, goods and, indeed, people? Will the hon. Gentleman investigate whether, because of this alarming propaganda by the SNP, its prominent supporters, such as Sir Hugh Fraser, are selling out in Scotland and investing funds in London and elsewhere?

Mr. Meacher: I do not think that anyone, other than members of the SNP, allows his political fantasies to run away with him and ingnore the hard-headed economic facts of interdependence between Scotland and England.

Concorde

Mr. Tim Renton: asked the Secretary of State for Trade what representations he has received in the light of the New York Port Authority's decision regarding landing rights for Concorde in New York.

Mr. Neubert: asked the Secretary of State for Trade what efforts his Department is making to back up the efforts made by British Airways and Air France to obtain landing rights for Concorde at New York.

Mr. Adley: asked the Secretary of State for Trade if he will make a statement on the question of Concorde's landing rights at New York.

Mr. Dell: The Port of New York Authority decided to postpone its decision so that it could consider any new proposals on how the noise impact of Concorde on local communities could be reduced. Its next meeting is on 14th April. The court hearing has been postponed, but a new date will be set this week.

Mr. Renton: Will the right hon. Gentleman confirm that if by any unlikely chance the Government are still in office in June they will not sign a new Bermuda Agreement until the American Government have lived up to their obligations under the present one and have ensured New York landing rights for Concorde?

Mr. Dell: We shall sign a new agreement on 22nd June, or before, if we negotiate a new agreement that is satisfactory to us. Among the problems with the existing agreement, as the hon. Gentleman suggested, is that we have not been able to obtain our true rights in respect of landing Concorde in New York. There are many problems about the current agreement and many improvements that we could make. If we can get a satisfactory agreement, we shall sign it.

Mr. Neubert: Will the right hon. Gentleman confirm today's report in an American newspaper that, whereas the

French Government have spent more than $2½ billion on the promotion of Concorde in the United States, our contribution has been only $100,000? As we each have a stake in the commercial success of Concorde, is there not a danger of our spoiling this aircraft for a penn'orth of tar?

Mr. Dell: I do not think there is any doubt about the commercial success of Concorde at Washington. There is no doubt that it would be a commercial success if it was allowed to fly into New York. That is not the issue. The issue is obtaining our rights to secure admission for this aircraft to New York.

Mr. Adley: Is the right hon. Gentleman aware that in a Written Answer to me last Thursday the Foreign Office said that
a party to a treaty may not invoke the provisions of its internal law as justification for its failure to perform a treaty."—[Official Report, 17th March 1977; Vol. 928, c. 305.]
Is not that precisely what President Carter is doing? In that case will the right hon. Gentleman consider, as part of his renegotiation of the Bermuda Agreement, taking action specifically against New York, not against other United States cities, and withdrawing traffic rights between New York and Britain, and New York and France, until this aeroplane is accorded the rights to which it is entitled under the treaty?

Mr. Dell: I do not think it would be right at this time to talk about the steps we might take in certain circumstances if we do not secure admission to New York. As the hon. Gentleman knows, and as I said in my answer, there is a further meeting on 14th April. We have a court case outstanding under which we can proceed. It is entirely premature to make the sort of threats that the hon. Gentleman invites me to make.

Mr. Terry Walker: Has my right hon. Friend had any chance to speak to his right hon. Friend the Secretary of State for the Environment about the report in yesterday's newspapers concerning the Noise Advisory Council's report on Concorde being made available to the New York Port Authority? Would he care to comment on that?

Mr. Dell: I have had an opportunity of talking to my right hon. Friend about this. The question which is the basis of


this matter in New York is whether Concorde can meet the noise requirements of Kennedy Airport. We believe that it can. We believe that that has been demonstrated to the New York Port Authority. We see no justification for its keeping Concorde out of New York.

Mr. McCrindle: Is the Secretary of State able to tell the House whether the load factor on the Concorde route between London and Washington has been above or below expectations and, at the same time, whether the level of complaints from those living around Dallas Airport has likewise been above or below expectations?

Mr. Dell: We have been favourably surprised by the low level of complaints from people living around Dallas Airport. The hon. Gentleman knows that Concorde has been operating to Washington at a satisfactory level of capacity. Whether that is below or above the expectations of British Airways I would not like to say.

Mr. Walter Johnson: Is not my right hon Friend aware that what angers the British people about this situation is that if the Americans had been first in the field with supersonic aircraft we would have been expected to receive this aircraft with open arms? Is this not a case of sour grapes on the part of the Americans?

Mr. Dell: I certainly think that my hon. Friend is right in suggesting that if the aircraft was American we would have been expected to receive it in London. I welcome the statements which have been made by various aircraft manufacturers in the United States recently and by others saying that Concorde should be allowed into New York.

Mr. Channon: asked the Secretary of State for Trade what progress he has made on obtaining new routes for Concorde.

Mr. Hastings: asked the Secretary of State for Trade what supersonic routes for Concorde are at present under negotiation; and whether he will make a statement.

The Under-Secretary of State for Trade (Mr. Clinton Davis): Apart from New York, we are concentrating our efforts on

securing Concorde routes to Melbourne and Tokyo.

Mr. Channon: Can the Minister say what progress he is making in his negotiations with the Governments concerned response from the Australian Government. ment will take an initiative with the new Government of India on this important matter?

Mr. Davis: We have had a favourable response from the Australian Government. Negotiations are still continuing with the Indonesians about supersonic overflying rights. The Indian Government have objected in the past, and we shall have to await developments with interest as and when the new Indian Government are formed.

Mr. Hastings: Is it not true that, whether or not the Indian Government continue to object, there is now no problem over a Far Eastern route? We could start it. Is not such a route vital for the future of Concorde, irrespective of whether we get permission to go to New York? Does not the Minister agree that it is extremely disappointing to see how slowly British Airways seem to be getting this route going? Air France has trained sufficient crews. Why is there a delay here? Will the Minister put pressure on British Airways?

Mr. Davis: I do not accept that British Airways have been slow in dealing with this matter. There has been an industrial dispute which has slowed up the opportunity to train crews. Matters are not as simple as the hon. Gentleman suggests, because far more crews are needed to deal with the London-Melbourne route than any other route. Nevertheless, I can assure the House that British Airways are proceeding with this issue as rapidly as possible. We must, of course, see what happens with regard to New York, because that situation impinges upon the operation of the London-Melbourne route.

Mr. Maxwell-Hyslop: Since the Minister has demonstrated that he is powerless to stop Air France flying up the English Channel supersonically and in so doing causing great disturbance, through sonic boom, over South-West England, will he ensure that he does not apply for routes which involve supersonic flying up the English Channel?

Mr. Davis: I have done my best to keep the hon. Gentleman informed of the progress which is being made over a specific complaint which has affected a substantial number of people. The hon. Member knows, as do other hon. Members, that this matter is being carefully investigated. The flights and the noise are being monitored. I hope that the hon. Gentleman, instead of making constituency points, will recognise that it is not a demonstration of powerlessness on the part of the Government but rather a recognition of the need to investigate this matter in depth before coming up with the sort of simplistic solutions which he has put to me.

Cotton Imports

Mr. Ronald Atkins: asked the Secretary of State for Trade what percentage of the home market for cotton textiles is supplied by foreign imports; and how this compares with the previous percentages over the last 20 years given at five-year intervals.

Mr. Meacher: It is estimated that the share of the home market for cotton yarn, in terms of weight, supplied by foreign imports in 1976 was 25 per cent., and for cotton cloth, in terms of area, it was 62 per cent. The comparable figures for 1959 were 4 per cent. and 31 per cent. respectively. With permission, I will include figures for intervening years in the Official Report.

Mr. Atkins: Does not this show a serious decline in the Lancashire cotton industry? Is there any hope that the industry will eventually survive? If there is such hope, in which direction must it look for help?

Mr. Meacher: We believe that through the Multifibre Arrangement we have already brought more help than ever before to the textile industry. We are taking a tough bargaining stance in the renegotiation of the arrangement in Geneva, particularly over cumulative disruption and the downward adjustment of growth rates, which are the two key problems for the textile industry. If we can succeed here—and we intend to try—the textile industry will be in a stronger position than ever before.

Mr. James Lamond: Has my hon. Friend's Department had the opportunity

of examining the level of imports of cotton yarn from India recently? Could he have a look at that?

Mr. Meacher: The import level of cotton yarn from India is about 20 per cent. I might add that it is exceeded by imports of cotton yarn from the EEC, which are 22 per cent. It is not, therefore, the largest supplier. I am glad to take this opportunity to announce that with regard to Indian hand-loom textiles, exports of which to the United Kingdom enormously increased in 1976, we have, in collaboration with the EEC, managed to secure a substantial cut-back in trade. In the case of woven shirts, which reached a level of 7·6 million pieces in 1976, we are today announcing a cut-back to 5·45 million for 1977. For women's shirts and blouses, which reached a level of 11 million in 1976, we are announcing today a cut-back to 7·4 million pieces. This is a substantial cut-back and I am sure that the House will be pleased to hear of it.

Following are the details:

The figures for the intervening years were as follows:



Cotton Yarn (in terms of weight)



per cent.


1961
8


1966
7


1971
12

Cotton Cloth (in terms of area)



per cent.


1961
39


1966
39


1971
48

Figures prior to 1959 are not comparable with those for later years.

Special Steel Imports (Price)

Mr. Hardy: asked the Secretary of State for Trade if he has received evidence that certain imported special steel products are currently offered for sale in the United Kingdom at prices which are well below those applying in the producer countries.

Mr. Meacher: Yes, Sir. In each case brought to its attention my Department is taking appropriate action.

Mr. Hardy: Is my hon. Friend aware that when action is taken and is known about in South Yorkshire it will be widely


welcomed? Will he confirm that in at least two cases imported special steels are available for sale in Britain at prices 50 per cent. below the price charged in the countries of origin? Will he show urgency in taking action on this issue?

Mr. Meacher: I have listened carefully to what my hon. Friend has said about a figure of 50 per cent. Our investigations, which are nearly completed, in several areas dealing with imports from different countries show that the figure may be substantially lower. I recognise, however, that there is a significant problem. Dealing first with Japan, which is perhaps the price leader, we have had an understanding on high-speed tool and stainless steels from last September for the first half of this year. In a few days' time we hope that negotiations will begin again in Tokyo for the second half of this year. Similarly, in the cases of Sweden and Austria we are ensuring that there are no breaches in the ECSC rules. In the case of Spain, where we already have a provisional charge on stainless steel imports, we have a full investigation in progress which started last month. We hope to announce the results very soon.

Mr. Tim Renton: Can the Minister tell the House what he thinks about the latest EEC discussions on general steel imports and whether he agrees that there may be a necessity for minimum prices on a number of steel products and import licences for all imported steels coming into the EEC? Is he taking part in the discussions?

Mr. Meacher: Of course, we are participating in discussions over the evolution of the EEC's steel policy at this particularly difficult time. I do not think it would be appropriate for me at this point to say exactly what we have proposed or what conclusions we hope will be reached. The considerations that the hon. Gentleman has mentioned are relevant.

Aircraft Noise (Gatwick)

Mr. Geoffrey Johnson Smith: asked the Secretary of State for Trade what proposals he has for reducing the present maximum noise limits at Gatwick Airport.

Mr. Clinton Davis: I have no plans to reduce them at present.

Mr. Johnson Smith: Is it not vital that the noise levels should be progressively reduced in view of the fact that a considerable number of people live within the monitoring points and in fact are closer to the monitoring points and are, therefore, subjected to greater noise than the so-called official noise limits?

Mr. Davis: I am aware of the noise problem at Gatwick. The hon. Gentleman will know from the consultation document issued on the London airports that there is likely to be, because of the projected increased use of Gatwick, a short-term worsening of the situation. That is unavoidable. On the other hand, he will also know that I have taken steps to restrict very substantially the number of night jet movements during the summer, and there is now a consultative document out to deal with the question of night jet movements at Heathrow and at Gatwick.

Mr. Molloy: Is my hon. Friend aware that the endeavours of himself and of his Department to reduce noise at Heathrow Airport are very much appreciated, but would he not accept that to suggest the simple transfer of some elements of traffic from one London airport to another is not really constructive? In view of his remarkable endeavours in the past three months, can he state whether any progress has been made in reducing night flights at Heathrow?

Mr. Davis: The redistribution of noise is always a problem, but it is separate from the need to utilise more effectively the facilities which will become increasingly available at Gatwick, and it is necessary that we should do that.
On the question of the reduction of night jet noise, only last week I issued the consultative document putting forward the options that are available for dealing with this matter. They comprehend essentially possible closures as far as night jet movements are concerned or gradual phasing out of noisier aircraft while permitting quieter aircraft to continue to operate. These matters should be carefully considered.

Mr. Johnson Smith: In view of the Minister's highly unsatisfactory answers, I beg to give notice that I shall raise the matter on the Adjournment at the earliest possible moment.

Mr. Hordern: asked the Secretary of State for Trade whether he is satisfied with the arrangements for monitoring aircraft noise at Gatwick.

Mr. George Gardiner: asked the Secretary of State for Trade what are his current arrangements for monitoring the noise levels created at Gatwick Airport as experienced in the main adjacent centres of population.

Mr. Clinton Davis: The noise caused by each jet aircraft take-off is recorded by the automatic noise monitoring system using four fixed microphones. In addition, sample measurements of aircraft noise are taken at a variety of other places around the airport.

Mr. Hordern: Is the hon. Gentleman aware that many of those who live near Gatwick Airport believe that airline pilots know exactly where these microphones are and do their best to avoid them? Will he either use his powers to get the airlines to fly on their proper flight routes or move the microphones to where the aircraft fly?

Mr. Davis: We believe that it is better to try to persuade those who have infringed the noise limits to adopt a better and more reliable course than they have in the past rather than engage in confrontation. The evidence is that the infringements constitute about one-half of 1 per cent. of all jet take-offs. At Heathrow the position has improved substantially. At Gatwick the position has not altered materially since last year.

Sir G. Sinclair: Is the hon. Gentleman aware that, having taken fairly robust steps to limit night noise at Heathrow, he has not taken comparative steps to help at Gatwick, where the nuisance is increasing—and he knows that it is increasing?

Mr. Davis: The hon. Gentleman is quite wrong, and he knows that he is wrong. The permitted number of night jet flights has been reduced by 25 per cent. in the summer and by 30 per cent. in the winter. This is a direct result of action which my Department has taken over the course of the last few years.

Tanker "Globtik Venus"

Mr. Canavan: asked the Secretary of State for Trade what investigations he

has made into recent events concerning the tanker "Globtik Venus"; and if he will make a statement.

Mr. Clinton Davis: On 3rd March the Attorney-General was asked to consider whether any criminal offence had been committed in connection with this incident, and inquiries are being urgently pursued. The industrial dispute involving the original crew has been resolved and the vessel is expected to sail from Le Havre at the end of this week.

Mr. Canavan: In view of today's reports about another planned raid similar to the "Globtik Venus' incident, will the Government take immediate and firm action against those responsible for setting such a dangerous precedent? Is it not sheer cant and hypocrisy for the Tories to make polite gestures towards the trade union movement when two members of their Shadow Cabinet are connected with Globtik Tankers Limited, which hired the gang of thugs to try to beat the trade union movement into submission?

Mr. Davis: I have no evidence to confirm what was said in the report in the Daily Mail this morning. As I have indicated, we are considering very carefully the action which should be taken in the circumstances arising out of the "Globtik Venus" matter.
What is far more important than the activities of the two hon. Gentlemen to whom my hon. Friend has referred is the reaction of the Opposition and the weasel words of the hon. Member for Hertfordshire, South (Mr. Parkinson). He said that he could not see any reason, nor did the Opposition, to hold a strong view about the recruitment of mercenaries to undertake this outrageous action. The House and country will now know where the Opposition really stand on matters affecting industrial disputes.

Mr. Parkinson: What I in fact said in the course of my remarks was that unreasonable actions often produced unreasonable reactions. In no way did I condone the action of Mr. Tikkoo, but I said that in the circumstances he had been provoked. Is the hon. Gentleman aware that he is repeating or setting for himself the low standard which he demonstrated in replying to the debate?

Mr. Davis: Lectures about low standards ill become the hon. Gentleman. What he said was:
This was not the way in which I would reclaim a ship of mine, but I do not own any ships. I do not see any reason"—[Official Report, 7th March 1977; Vol. 927, c. 1120.1

Hon. Members: Reading.

Mr. Speaker: Order. It is very unfair to others who have later Questions on the Order Paper to go over a debate which has already been held.

Mr. Davis: The Opposition disgraced themselves on that occasion.

Mr. Prescott: Is my hon. Friend aware that the leader of the gang of armed mercenaries recruited on Humberside, a Mr. Miller, has criminal convictions for rape, buggery, larceny and possession of firearms? He is not a defender or upholder of the law. It is extremely noticeable that the unions have praised the Minister's action in dealing with this matter but have noticed with astonishment that there has been little noise from the Opposition, who had a lot to say about the Shrewsbury Two and the Clay Cross rebels.

Mr. Davis: Not only the trade unions but the General Council of British Shipping and the employers condemned the action. The only people out of step were the Opposition.

Mr. Nott: Is the hon. Gentleman aware that, with the single exception of the hon. Member for Feltham and Heston (Mr. Kerr), although there is great gloom on his side of the House today, he will have to think of an issue other than the "Globtik Venus" on which to fight the election? His answer was very unsatisfactory indeed.

Mr. Davis: The relevance of the "Globtik Venus" issue is that it depicts in all its nakedness the real way in which the Conservative Party looks at trade unions. We are not gloomy; but I think that the Opposition should not be quite so self-satisfied. They resemble turkeys lust before Christmas.

Power Plant Industry

Mr. Rost: asked the Secretary of State for Trade when he expects to respond to the CPRS Report on the

future of the electrical power plant industry.

Mr. Meacher: The Government are carefully considering all aspects of the proposals in the CPRS report and will be responding as soon as possible.

Mr. Rost: Does the Minister agree that the only way in which we can maintain in this country a viable electrical power plant industry with an export capability is by having a flourishing nuclear industry? Will he have words with the Secretary of State for Energy and remind him that some crucial decisions must be taken on the future of the nuclear industry in this country if the electrical power plant industry is to survive?

Mr. Meacher: That is a matter for my right hon. Friend. I shall bring the hon. Gentleman's remarks to his attention. All these matters are being taken into account in our examination of the CPRS Report on the electrical power plant industry.

Mr. Conlan: In any consideration of the report, will my hon. Friend make it perfectly clear that the Government's attitude is that rationalisation of the industry will not be made an excuse for substantial factory closures in any part of the industry, with substantial numbers of people losing their work?

Mr. Meacher: The proposal for rationalisation of the industry was one of the five main recommendations made by the CPRS. We are now examining its report. Before any conclusions are reached we shall have the fullest consultation with all those concerned, including particularly the trade unions.

Mr. Hugh Fraser: Before the Minister makes the decision, will he put to the House the Government's genuine energy policy? Will he assure the House that there will be no nonsense about building the unnecessary Drax power station without the consent of hon. Members?

Mr. Meacher: The proposal about the Drax B station was again one of the recommendations of the CPRS Report that we are examining. The right hon. Gentleman's question is more relevant to the Secretary of State for Industry. All I can tell him is that this has been fully


considered along with all the other recommendations in the report.

Mr. Whitehead: Will my hon. Friend take into consideration the fact that we have heard nothing from him today that we did not hear during the last Question Time when his Department appeared? Will he now say that before Easter we shall at least get some progress in regard to export credits, because these are vital to the firms of Babcock and Wilcox and Clarke Chapman which are at the heart of our industrial strategy?

Mr. Meacher: I appreciate the significance of those industries with regard to exports. I can only reiterate what I said before—that we exclude no option in examining how we can give assistance in respect of exports. My hon. Friend will not expect me to spell out the ideas that we have been examining, but I can assure him that there has been a great deal of discussion on this issue. I am also aware of the urgency of the matter. My right hon. Friend the Secretary of State for Industry has said that it would be some little time before he could make an announcement, but we are aware of the need to make an announcement as quickly as we can.

Mr. Crawford: Does the Minister realise that many thousands of employees at Babcock and Wilcox will not be prepared to wait "some little time" for an announcement?

Mr. Meacher: It is precisely because we are engaged in the fullest consultations on the proposals, which must be wide-ranging and comprehensive, that we cannot produce conclusions before the House quickly. I am sure that the hon. Gentleman would prefer us to reach the right conclusion rather than one which perhaps might appeal to him but which would certainly have a devastating effect on employment.

Mr. Buchan: In view of certain developments overseas, which were a disappointment to us and to Babcock and Wilcox, will my hon. Friend press upon his right hon. Friend the imperative nature of getting the Drax B order through as quickly as possible? Will he also bear in mind that only a few short months ago the SNP, which is now speaking weasel words in favour of the workers in Babcock and Wilcox, was asking for

a cut-back in the electricity generating programme, which would plunge my local factory into total redundancy?

Mr. Meacher: My hon. Friend has again hit the nail on the head. I shall certainly draw his remarks to the attention of my right hon. Friend. We intend to produce a report to the House as soon as we possibly can, but I ask hon. Members to recognise that very extensive consultations have to be undertaken. There are many interests involved and we want to get it right.

Air Fares

Mr. Hal Miller: asked the Secretary of State for Trade what control he exercises over the level of air fares in connection with International Civil Aviation Organisation obligations.

Mr. Clinton Davis: Membership of the International Civil Aviation Organisation places no obligations on the Government with respect to the level of air fares.

Mr. Miller: Is the Minister telling the House that he has absolutely no say in the setting of air fares? Will he tell us what particular steps he has taken to do something about the excessively high level of fares in Western Europe? Has he suggested to his colleagues in the Council of Ministers that European rates should be declared a cabotage route?

Mr. Davis: The Air Service Agreement with other countries gives the Governments concerned the right to control air fares on the services they cover. Fares are normally agreed between IATA and submitted for approval to both sides. If either Government is dissatisfied, the matter is settled by negotiation. The question of European fares is under review in Europe. As the hon. Gentleman well knows, the CAA has recently given close attention to this, and I am awaiting its report.

Civil Aviation (Bermuda Agreement)

Mr. Arnold: asked the Secretary of State for Trade what further progress has been made on renegotiating the Bermuda Agreement.

Mr. Dell: The fourth round of negotiations for a new Air Services Agreement was held in London from 28th February


to 11th March. Some progress was made towards agreement on the methods of regulating capacity on North Atlantic services and establishing tariffs. The negotiations will be resumed in Washington on 28th March.

Mr. Arnold: Is it not the case that the Americans have still absolutely no intention of restricting the activities of their airlines to a policy of single designation? What is the Government's policy with regard to regulation as opposed to competition?

Mr. Dell: The Government are in favour of competition, but not by means of putting such grossly excessive capacity on the North Atlantic that it means a gross waste of fuel at a time when energy conservation is important and leads to excess fares paid by customers travelling over the North Atlantic. It is not true to say that the United States has entirely ruled out the idea of single designation. What we are concerned with is a system of capacity control. In the last negotiations the United States made certain proposals in this regard. We are now negotiating with the United States, and I am sure that the hon. Gentleman would not wish me to reveal the whole of our negotiating position.

Mr. Warren: Within the concept of capacity control, will the Minister consider introducing regulations for the control of air freight and passenger charter flights?

Mr. Dell: We have, of course, considered whether charter should come within the renegotiation. The present view of both parties is that it should not, althugh charters are closely connected with services across the North Atlantic. That is the basis upon which we are negotiating at the moment and it seems more convenient to both sides. We want a memorandum of understanding with the United States to govern the operation of charters, and I think that that is better done outside these negotiations.

Sir J. Langford-Holt: As the United States Government have already stated that they do not have the authority to stop aircraft in certain circumstances landing within the United States, is the right hon. Gentleman satisfied that they

are in a position of authority to sign such an agreement?

Mr. Dell: That is a very interesting question which we shall have to discuss during the negotiations. We have had many disagreements with the United States Government on the interpretation of the Bermuda Agreement. One of the reasons why we wish to renegotiate the agreement is so that we can have an agreement that both sides understand and which is actually operated. We believe that there are cases where the United States has not operated the Bermuda Agreement. The landing rights of Concorde at New York are one example.

Arab Boycott

Mr. Sainsbury: asked the Secretary of State for Trade whether he will take measures to deny Government support and facilities for various kinds of trade transactions in order to combat the discriminatory effects of the Arab trade boycott.

Mr. Dell: My Department and the British Overseas Trade Board will continue to give advice and assistance to British exporters to the markets of the Middle East.

Mr. Sainsbury: Is the Secretary of State aware that the Government's lack of action has contrasted very unfavourably with that of other Gov1ernments in taking positive action against the boycott, against which they have expressed positive disapproval?

Mr. Dell: Our position in practice is the same as that of other Governments. We have indicated that we oppose and deplore the boycott, which lacks international authority. We have also said that it must be left to the decision of individual companies how they react in particular situations, although we give advice. In practice, our position is the same as that of our partners in the European Community and other Governments.

Mr. Greville Janner: Is my right hon. Friend aware that the authentications by the Government of boycott documents is regarded as a gross offence to Israel and those concerned with free trade? Will he reconsider this practice with the Foreign


Secretary, who has openly condemned the Arab trade boycott?

Mr. Dell: As my hon. and learned Friend knows, this is a question for my right hon. Friend the Secretary of State for Foreign Affairs. It has been explained by Ministers in that Department, however, that what is authenticated is the signature of notaries.

Mr. Hugh Fraser: Is the right hon. Gentleman aware that the United States Government and the Government of Canada and their Departments of Trade have come out forcibly against the concept of a boycott against the interests of international trade? Surely he should be seriously considering bringing legislation in this country into line with that proposed by the United States and Canada.

Mr. Dell: We, too, have expressed our opposition to the boycott. I am examining what the United States is doing. It has further proposals for legislation which may be brought before Congress. As far as I am able to say at the moment, the practical effect of the present United States position is that it leaves to individual companies their own decisions as to how they react in the situation they are faced with. The practical effect, therefore, seems to be the same as the practical effect of our policy. If there are changes, we shall observe them.

Mr. Geoffrey Finsberg: What advice is the right hon. Gentleman giving to industries for which his Department is the sponsoring Ministry? Is he telling them to make up their own minds, or is he telling them to take the advice which the Government are giving and not give in to boycotts?

Mr. Dell: We give private advice on this matter to companies which ask us for it so that they may be aware of the nature of the problems known to us. A fact which is relevant in this context is that in 1976 our exports to Israel, I am glad to say, went up very substantially at a time when imports by Israel were stable or declining. In that respect, we have a good record in our trade with Israel. That is perhaps one measure by which our policy can be considered.

Industrial Democracy

Mr. Ridley: asked the Secretary of State for Trade what consultations he has

so far held on the Bullock Report; and with what results.

Mr. Jim Lester: asked the Secretary of State for Trade what consultations he has had with the CBI or other employers' associations on the recommendations of the Bullock Committee; and if he will make a statement.

Mr. Dell: I have had discussions with the CBI and the British Institute of Management. I have also received the views of a number of other organisations. It is too soon to talk about results.

Mr. Ridley: In his discussions with the CBI, did not the right hon. Gentleman realise that the CBI was implacably opposed to the majority report? If his earnest to work with the private sector means anything at all, could he not make a gesture and say that the Government have now decided to drop the whole proposal?

Mr. Dell: No, I will not make that gesture. Advances in industrial democracy will be of value to industry. I am aware that the CBI is implacably opposed to the majority report. It has made that perfectly clear. Nevertheless, very useful discussions with the CBI are currently going on, and the Government are committed to introducing legislative proposals on this subject by the summer.

Mr. Nott: Since the Government apparently have abandoned the majority proposals of Bullock, will they now put in its place the whole of the Liberal Party's policy for participation, and are we to assume that the Prime Minister will announce on Wednesday that this is the new policy of the Government?

Mr. Dell: At any rate, the hon. Gentleman concedes to the Liberal Party that it has a policy on participation. That is more than he can claim for his own party.

Mr. Kelley: Is my right hon. Friend aware that in no sense can there be any political democracy until there is some form of economic democracy, that at least the Bullock Report is moving in that direction, and that it should be looked upon benignly by the Government?

Mr. Dell: We are trying in this area to get a consensus about the way in which industrial democracy shall be


advanced in this country. That is the process going on in Europe. We believe that this country cannot dissociate itself from that process. That is why in my discussions I am trying to seek a consensus about a basis on which to proceed.

Laker Airways Skytrain

Mr. William Shelton: asked the Secretary of State for Trade what progress he has made in bringing the United States of America to accept Skytrain services as part of the Bermuda Agreement.

Mr. Dell: On 18th February our Embassy in Washington formally asked the United States Government to issue an operating permit to Laker, in accordance with the Bermuda Agreement. However, as I informed the House on 14th February 1977, I envisage negotiating a special arrangement with the United States to cover the operation of Sky-train instead of including it in the new Air Services Agreement.

Mr. Shelton: Does the right hon. Gentleman accept the view held in some quarters that the apparent lethargy by his Department springs in part from its recent defeat by Mr. Laker?

Mr. Dell: The hon. Gentleman's accusation is unjustified. I made an announcement in the House on 14th February. On 18th February we made representations to the American Government asking them to issue a permit so that the Laker Skytrain could operate. The CAB has now asked Mr. Laker for further information. It is our wish to get the Laker Skytrain into the United States, and we shall exert all necessary pressure to that end.

Mr. McCrindle: Has there yet been any indication that an application for a licence will be made by an American counterpart of the Laker Skytrain?

Mr. Dell: Not yet. But obviously, if the United States Government indicate to us a wish to discuss that matter, we shall ourselves be ready to discuss it with them.

Motor Vehicle Headlamp Bulbs

Mr. Edwin Wainwright: asked the Secretary of State for Trade how many

light bulbs of the type used in motor car headlamps were imported into the United Kingdom during each of the past four years.

Mr. Meacher: Imports of all vehicle bulbs not exceeding 28 volts were 22 million, 28 million, 34 million and 49 million respectively for the four years to 1976.

Mr. Wainwright: Does my hon. Friend realise that the importation of these bulbs is doing great harm to companies in this country? Is he aware that these companies are saying that the cost of materials is equal to, if not greater than, the cost of these imported bulbs? Is not that dumping? Will my hon. Friend do something about the quality of these bulbs by letting the public know that they are very much below the standard of bulbs manufactured in this country?

Mr. Meacher: That last point is a matter for my right hon. Friend the Secretary of State for Transport. My hon. Friend asked me about dumped bulbs. The Lighting Industry Federation submitted an anti-dumping application to us last year, but it withdrew it a couple of months ago because it could not provide domestic prices for comparison for more than a few of the 200 different types of bulbs imported. We are therefore examining the possibilities either of operating through the Commission to seek price and quantitative action from the Eastern bloc suppliers or of across-the-board import restrictions for all suppliers. I hope that one or other of these routes will he successful.

Steel

Mr. John Ellis: asked the Secretary of State for Trade what are the latest figures for import and export of steel.

Mr. Meacher: In the 12 months ending February this year, 4 million metric tons of ingots, semi-finished and finished steel were imported and 3·6 million metric tons exported.

Mr. Ellis: Does my hon. Friend agree that the figure for imports is incomprehensible to many people, given that we are cutting back on production? If this is due to the cyclical production of steel, does not my hon. Friend agree that we should be making investment now? In


that event, will he have a word with British Steel at Scunthorpe so that it might put forward plans for increasing blast furnace capacity there?

Mr. Meacher: The question of imports is undoubtedly affected by the fact that customers were lost when the British Steel Corporation could not meet the demand in 1974 during the after-effects of the three-day week. [Interruption.] Hon. Gentlemen may laugh, but it is a fact which their business friends realise. Once customers are lost to cheap imports, it is very difficult to get them back. Opposition Members may try to conceal their embarrassment about the disaster of two years ago, but the effects of it are still being felt. We are encouraging the British Steel Corporation to increase investment as a result of the funds that we are making available both for investment and for stocking.

Mr. Tim Renton: Coming back to something rather more recent than the three-day week, is the Minister satisfied that the Japanese are following the voluntary restraint on exports of steel agreed with Britain and other EEC countries in November? If he is not satisfied, what action does he intend to take?

Mr. Meacher: In respect of special steels, we are having discussions with the Japanese in Tokyo on the 28th and 29th of this month. In regard to high speed steel the Japanese have generally kept to the forecast, but on tool steels and stainless steels there is some dispute. On bulk steels, I draw attention to the fact that we made an announcement on 14th March that we intend to investigate the Japanese light sections and flats.

Mr. Flannery: Will the Minister take note of the deep concern that is felt in all steel areas, including Sheffield, about imports of steel? Will he accept that at the new Thrybergh Mill near Rotherham recently when proper investment took place—which did not happen under the Conservative Party—a world record for production of steel was achieved?

Mr. Meacher: That is a very interesting and important point.

BUSINESS OF THE HOUSE

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): With permission, I wish

to make a statement about the rearrangement of business.
At the end on Tuesday, following the opening of the defence debate, the motion on financial assistance to the Meriden Motor Cycle Co-operative.
On Wednesday, debate on the Opposition censure motion.
On Thursday, Lords amendments to the Social Security (Miscellaneous Provisions) Bill, motion on the Family Income Supplements (Compuutation) Regulations and motions on the European Communities (Definition of Treaties) Orders. As already announced, the Chairman of Ways and Means has opposed Private Business for consideration at 7 o'clock.
On Monday 28th March, conclusion of the debate on the Defence Estimates.

Mr. Pym: Will the Leader of the House indicate upon what motion the debate on the defence White Paper will take place tomorrow?

Mr. Foot: The debate will open tomorrow and conclude next Monday. Before then we shall have put down a motion—[interruption.]—we shall have put down a motion in plenty of time for the Opposition to make up their minds by how much they wish to increase public expenditure in this field.

Mr. Pym: Are we to assume that the Government have not yet tabled a motion?

Mr. Foot: We have not yet tabled a motion but there will be plenty of time for the Opposition to decide by how much they wish to increase public expenditure.

Mr. Pym: Will the Leader of the House indicate whether the motion will be for the Adjournment of the House or will it be a substantive motion on the defence White Paper?

Mr. Foot: As I have already indicated, the right hon. Gentleman will have a full opportunity to tell the country by how much his party will increase public expenditure on defence.

Mr. English: Can my right hon. Friend suggest where the overwhelming majority of Liberal Members are? Is their absence of any significance. Are they in any particular place?

Mr. Speaker: Order. We are dealing with the business for the rest of the week.

Mr. Rost: On Wednesday's business, can the Leader of the House reassure us, and put the nation out of its misery, by telling us that Labour Members will be voting on this matter?

Mr. Ioan Evans: Will my right hon. Friend accept that we appreciate the Opposition spokesman realising that we shall decide which motions we debate next week?

Mr. Foot: Let us proceed to the debate on Wednesday, and I am sure that it will then be satisfactory to proceed to the business next week.

Mrs. Winifred Ewing: Does the Leader of the House appreciate that the Tories' tears on censure are of the nature of crocodile tears? It was only because the Scottish National Party put up two Tellers last Thursday that—

Mr. Speaker: Order. I must tell the hon. Lady that we are dealing with business.

Mr. Goodhew: Will the Leader of the House ensure that before we begin the debate tomorrow we know what motion we are speaking upon?

Mr. Foot: I am sure that the hon. Member will be capable of making a speech whether there is a motion down or not.

Mr. Gow: Will the Lord President answer the question put by my right hon. Friend the Member for Cambridgeshire (Mr. Pym)? Upon what motion will tomorrow's debate take place, and does the Lord President intend that the Government will put down a motion on defence?

Mr. Foot: I do not think that the House should be worried. There will be the first day's debate tomorrow— [HON. MEMBERS: "On what?"]—and in plenty of time for Monday, when the House will wish to reach a conclusion on the matter, there will be a motion on the Order Paper.

Mr. Ian Gilmour: Will the Leader of the House explain why he is not putting a motion down tomorrow?

Mr. Foot: The right hon. Gentleman can appreciate the situation perfectly well. There is a normal practice in this House whereby when there is a two-day

debate on these matters, the Division takes place on the second day. The motion will be put down in plenty of time for hon. Members to put down amendments to it if they wish to do so.

Mr. David Price: I must press the Leader of the House. It is intolerable to start a two-day debate without a motion in front of us. Surely it is not unreasonable, 24 hours beforehand, to know the motion on which we shall be voting next Monday. In a multi-party Parliament I am sure that the minor parties at least will require that much of the Government.

Mr. Foot: It is perfectly simple to debate the matter in the way in which I have indicated. The House will reach a conclusion on Monday in the way I have described.

Mr. Gow: On a point of order, Mr. Speaker. The Lord President has come here to make a statement on tomorrow's business. Should he not tell us on what motion tomorrow's debate will take place?

Mr. Speaker: That is not a point of order for me. The Leader of the House decides such matters.

Mr. Onslow: On a point of order, Mr. Speaker. How is it that if there is no motion, the subject of the debate can be confined to defence? If there is no motion surely it is open to the House to talk on all matters of importance?

Mr. Speaker: I shall rule on that when I see the motion.

STATUTORY INSTRUMENTS

Mr. Speaker: We shall now take the motion on Statutory Instruments in the name of the right hon. Gentleman the Leader of the House. The Question is—

Mr. Tim Renton: On a point of order. Mr. Speaker —

Mr. Speaker: It is customary to wait until I have finished before hon. Gentlemen raise points of order.

Mr. Renton: I apologise, Mr. Speaker. I stand rebuked.

Ordered,
That the Health Services Board (Deputies) Regulations 1977 (S.I., 1977, No. 323) be referred to a Standing Committee on Statutory Instruments, &amp;c. — [Mr. Foot.]

BUSINESS OF THE HOUSE

Mr. Tim Renton: On a point of order, Mr. Speaker. If I may refer to your previous remarks, may I take it that you have some cognisance, which is denied to the rest of us, of what is in the motion? You said that when you saw the motion you would give your ruling whether it would be possible to raise matters other than defence. May we take it that you know more about the subject than we do?

Mr. Speaker: What I said was quite clear. I said "when" I saw it. I do not know any more than the rest of the House on this matter.

Mr. Goodhew: Mr. Goodhew rose—

Hon. Members: Sit down.

Mr. Speaker: If it is a genuine point of order, I shall hear it.

Mr. Goodhew: I hope you will agree that it is a genuine point of order, Mr. Speaker. The right hon. Gentleman the Leader of the House has given the impression that there will not be a motion before the House tomorrow. All we are trying to find out is whether, if there is not to be a motion before the House, you can or cannot guide us today or tomorrow.

Mr. Speaker: If the Liberal Party does not mind, I shall fall back on a Liberal saying. We must wait and see.

Orders of the Day — REDUNDANCY REBATES BILL

Order for Second Reading read.

3.42 p.m.

The Minister of State, Department of Employment (Mr. Harold Walker): I beg to move, That the Bill be now read a Second time.
Let me say frankly at the outset that this Bill is a consequence of the defeat on Second Reading on 7th February of the Reduction of Redundancy Rebates Bill. In doing so, I am telling the House nothing of which it is not already fully aware, but I want to make it quite clear that I am not going to try to be coy with the House or be other than candid and open about our purpose.
Having said that, let me also make it clear that this is not a rehash of the earlier Bill. That Bill had the simple purpose, as I explained on 7th February, of reducing employers' rebates from the Redundancy Fund from 50 per cent. to 40 per cent.
This Bill, of itself, does not reduce the rebate at all. It is quite different in concept since it enables the rebate to be varied—varied up or down. I shall not mislead the House, let me hasten to add, about our early intention—and I shall come to that in a few minutes. I repeat that I want to be candid and open about our intention. But I believe that the formula on which this Bill is based is not only different but is a better approach than the earlier one. Let me say why that is the case and why it may be more attractive, or perhaps less repugnant, to hon. Gentlemen opposite.
This is not the first time that a Government have sought to vary the rebate from that provided for in the 1966 Act— and I am sure it will not be the last, if not least because hon. Gentlemen opposite, it I understand their attitude, would like to see it varied upwards, if not now, perhaps at some future time. Whether the best way to do so is through primary legislation— with all that accompanies it, not least the demand on Parilament—is open to question. But notwithstanding the cautious approach that all of us should have when confronted with

enabling legislation, I think we should now recognise the need for flexibility in this matter—and equally recognise that it is a flexibility better exercised by order rather than by the sometimes long and cumbrous procedures entailed by a Bill.
Furthermore, I am sure the whole House will hope that the circumstances which have made necessary a reduction in the rebate will prove to be of short duration. No one will be more pleased than I to see a return to a more generous level of rebate. When those changed circumstances arise, I am sure that hon. Gentlemen opposite will join me and my right hon. Friend in wishing to be able to restore higher levels of rebate more speedily than by passing a Bill through Parliament. I regret that we did not go for an enabling Bill in the first place— not just because we lost the vote of 7th February, but because it seems to make better sense.
I should now like to say something about the Bill itself. It is intended to enable rebate to be varied between one of 10 different rates over the range of 35 per cent. at the bottom level to 80 per cent. at the upper level. At no time would it be possible under the proposed measure to introduce rebate at the rate of 40 per cent. The House has made its views clear and we must respect them. Nevertheless, we have thought it right to make provision for a near alternative.

Mr. David Mitchell: The Minister said that the precise rates laid down in the earlier Bill are not included in this legislation and added that there was an alternative. What are the Government's intentions? Obviously they are introducing this measure with the intention of using it.

Mr. Walker: I shall come to that point a little later in my speech. I have already said that I want to be frank and candid about our intentions. I am hesitant to inflict tedious explanations on the House. If I thought that we all understood the way in which the Bill will operate, I should be quite happy to say no more on the subject. But at first sight the Bill is not particularly easy to understand, and some explanation might be helpful.
A redundancy payment is calculated at three different rates according to age and length of service. The highest rate is


one-and-a-half week's pay for each complete year of service over the age of 41. The second, or middle, rate is one week's pay for each year of service below that age, but after age 22. The third and lowest rate applies to service from age 18 to 21.
The method chosen for calculating rebate for the 1965 Act was to set down three different fractions of a week's pay, each of which corresponded to one of the rates at which entitlement to a redundancy payment accrued. All this may seem complicated, but in practice it is relatively easy. For example, the rebate payable in respect of service which counts at the rate of one-and-a-half week's pay is three-quarters of a week's pay. Similarly, the rebate payable against the two lower entitlements of one week's pay and half a week's pay are one-half and one-quarter of a week's pay respectively.
The same principles apply to the sets of fractions set out in the schedule to the Bill. Accordingly, the first set of fractions of 21/40ths, 7/20ths and 7/40ths equate to a flat rebate rate of 35 per cent. The second set of fractions produce a rebate of 41 per cent. and the third set of 45 per cent. Thereafter, each set of fractions increases the rebate rate by 5 per cent. until it reaches a maximum of 80 per cent. at the top.
The two limits have been carefully chosen. A figure of 35 per cent. represents the lowest point to which rebate can be reduced without further legislation. The 80 per cent. maximum is broadly equivalent to the rebate of one and one-sixth week's pay, or very roughly 78 per cent., which was payable under the original 1965 provisions in respect of the one-and-a-half week's pay entitlement.
What emerges from all the seeming complexity is really a simple system of varying rebate. It will be unnecessary to bother employers with the detailed processes leading up to the overall rebate. In practice, all they will need to know in order to claim their full entitlement is the percentage rate to be applied.
As I said at the outset, this is an enabling Bill. One point to which we gave the most careful consideration was whether the powers should be exercised subject to the affirmative procedure, or

whether it was sufficient to seek to adopt the negative resolution procedure. We came to the conclusion that adequate parliamentary control can be exercised by making the order subject to annulment by resolution of either House.
There is nothing devious about this. In no sense should it be taken to imply a hope on the part of the Government that it may be possible to slip through an order without anybody noticing. Advance publicity has to be given to changes in rebate. Employers need to know their entitlement. Even therefore if an order is overlooked on being laid, its existence cannot escape notice for more than a few days at the most, thus giving ample opportunity for objections to be raised as necessary.
The Bill will also amend the Northern Ireland legislation. As I explained to the House on the 7th February, Northern Ireland is not covered directly by the Redundancy Payments Act 1965, but by parity legislation contained in the Contract of Employment and Redundancy Payments Act (Northern Ireland) 1965. Given that in practice the two schemes are operated as a single system, Clause 2 seeks to short circuit the lengthy Order in Council procedures by providing a similar enabling power for exercise in Northern Ireland.

Mr. Graham Page: In respect of Northern Ireland an order will never come before the House.

Mr. Walker: That is true, but I can give the House the assurance that we shall proceed on strict parity lines. Therefore, when an order that applies to Great Britain is laid before the House, hon. Members representing constituencies in Northern Ireland will have the opportunity to express any objections and views.
There are two points that follow from the right hon. Gentleman's intervention. The first is that the enabling power will be vested in the Department itself rather than in the Minister. I understand that that follows convention for which there is well-established precedent. The second point has already been dealt with in my reply to the intervention. I assure the House that use of the powers in the way that I have described—on the basis of maintaining strict parity—should avoid


any absurdities that could arise if different rates of rebate were applied over any length of time.
Having dealt with the mechanical details of the Bill, now turn to the question that was raised by the hon. Member for Basingstoke (Mr. Mitchell) about the way in which the Bill will be used.
Initially, we propose to make an order reducing rebate to 41 per cent. This will have the direct effect of reducing the public sector borrowing requirement. Put very simply, rebates are paid from the Redundancy Fund. By definition these payments are public expenditure. If the Fund is in deficit it has to be financed by borrowing from the National Loans Fund which involves a direct charge on public funds by any definition. On the other hand, if it is in surplus, that has the effect of reducing the public sector borrowing requirement through being invested in Treasury Bills or stock. There can be no argument about this. It is a matter of fact.
The hon. Member for Brentford and Isleworth (Mr. Hayhoe) was interviewed on Radio 4 on the morning after the debate on the earlier Bill. I hope that the transcript does not misquote him. He said—when challenged about the Opposition's attitude on public expenditure and when reminded that his party has repeatedly said that the Government should cut public expenditure—that the Bill would not cut public expenditure. He said that the money involved was in the Redundancy Fund and that all the money in the Fund comes from industry — and I do not challenge that. He also said that the money in the Fund was all used for making redundancy payments and could not be used for anything else.
In fact, as I have just described, when the Fund is in surplus, it is committed by the provisions of the Redundancy Payments Act 1965, Section 26(3), to use that money as directed by the National Loan Commissioners and to invest it in Government stock. To that extent, it does offset the public sector borrowing requirement. Equally, when the Fund is in deficit, that deficit is incurred against the public sector borrowing requirement.
The hon. Member for Brentford and Isleworth also said that Ministers had made no attempt during the debate, to

justify the Bill on the ground of public expenditure. I am sure that the hon. Gentleman did not intend to do us an injustice, but that was the main burden of my speech. In a brief speech, I emphasised that point at least four or five times.

Mr. Barney Hayhoe: When I said that the money could not be used for any other purpose, I was paraphrasing what was said by the Minister in introducing the Bill on 26th April 1965.

Mr. Walker: No doubt the hon. Gentleman has had an opportunity since then to look at the 1965 Act which says that any moneys forming part of the Fund may from time to time be paid over to the National Debt Commissioners and invested by them, in accordance with such directions as may be given by the Treasury, in such securities as are authorised by Parliament, as investments for savings banks funds. It has been modified since by the Social Security Act 1973.

Mr. David Mitchell: Is that not a direct contradiction of the economic policy of the Chancellor who has said that his purpose is to try to attract more investment and funds into industry? The Minister is now telling the House that the Government will take money out of industry and put it back into the hands of the Treasury. That is in direct opposition to the Chancellor's policy.

Mr. Walker: I understood that the Opposition want reductions in public expenditure and that they are critical of the Government for not reducing it adequately. This is a reduction in public expenditure. I was replying to the point that was made by the hon. Member for Brentford and Isleworth in a radio interview when he said that we had not made out a case for the Bill on the ground of public expenditure.

Mr. Douglas Henderson: Is the Minister not aware that last week there was a sizeable majority against the Government's public expenditure White Paper? Can the Minister tell us what the economic effect of the Bill will be? This question was raised when the subject was debated previously and the hon. Gentleman suggested that it would be £80 million per


annum. Can he say whether that figure will be changed as a result of what he intends to do today?

Mr. Walker: I shall answer at least a part of that point in a moment. This is an enabling Bill and its effect will depend on the terms of the order that will be laid before the House and on what the House decides to do in respect of that order.

Mr. Henderson: I am sorry to press the point, but the hon. Gentleman has been kind enough to explain the effect of these different permutations in the table. Surely it is possible to give permutations for the economic effect of each level set by the table.

Mr. Walker: If the hon. Gentleman will let me continue, I may be able to satisfy him on at least part of his question.
It has been stated in the House on a number of occasions that the Redundancy Fund is intended to be self-supporting. There is nothing in a proposed reduction of rebate which detracts from this principle in any way. At the moment, the Fund is in surplus to the extent of approximately £7 million. If rebate is reduced naturally we expect that the surplus will increase. This increase will have a direct beneficial effect on the public sector borrowing requirement. Admittedly if that surplus is allowed to grow unreasonably, it could give rise to problems in the future.
But machinery exists for adjustment and it can be used as and when necessary. Either the Fund's income can be reduced by cutting the allocation which is made front the employer's share of class 1 earnings-related contributions — at present 0·2 per cent. — or alternatively, the rate of rebate can be increased. Of these two possibilities, it is the second that could be done most easily and quickly under the provisions of the Bill. I have already put the case for being able to make future changes with the minimum of delay according to the requirements of the economy and the state of the Redundancy Fund.
There is also the question whether the Government are justified in looking to employers for a further contribution intended to play a relatively modest part

in a vitally important overall package. Looked at in isolation the savings may appear small. For example, on the basis of the best estimates we have been able to make for 1977–78, each 1 per cent. of rebate is the equivalent of approximately £1·8 million on the Fund for a full year.
It may help the hon. Member opposite who put a point to me if I quote a full year saving for 41 per cent. rebate. The answer is £16·2 million. To put it another way, expenditure from the Fund will be reduced by approximately £1·35 million a month—and I hope hon. Members opposite will find that helpful. The actual amount saved during the coming financial year must depend of course on how soon it is possible to reduce the rebate and on how quickly we can introduce the order, have it approved by the House and made effective.
These figures may seem small when compared to the £1,000 million July package. Taken by themselves they may not seem worth bothering about, but that would be missing the whole point of the exercise. The package announced by the Chancellor last July is fundamental to the healthy economy of the country. It went much wider than simply cutting expenditure and reducing the public sector borrowing requirement. Its declared aim was the deliberate encouragement of an upturn in the economy. It was also spread to do the least damage bearing in mind the need to preserve rightly important social and economic priorities. Directly or indirectly, there can be very few people in this country who have not been required to make a contribution in some form or other, however small, to the stringent measures dictated by our economic circumstances.
We believe it not unreasonable to ask employers to make an additional contribution within the context of the package as a whole. I appreciate that some employers may feel the impact more harshly than others. Even so a sense of proportion must be retained. For example, the maximum additional cost to an employer of a reduction in rebate to 41 per cent. will be something less than three weeks' pay for each employee made redundant. On average, the amount will be much smaller, in most cases a week's pay or less. Additional costs of this order should not be difficult to assimilate.
As I made clear at the outset, this is an enabling Bill. It will not reduce rebate, but, given all the circumstances which surround its introduction, it would have been wrong for me to attempt to conceal in any way the immediate use to which we propose it should be put on enactment. On this occasion, and I freely acknowledge the stimulus to clearer thinking which was given by the House through its rejection of an earlier Bill, we have produced a more useful and flexible instrument for the administration of the statutory scheme. I think that the Bill achieves this object. I have no hesitation in asking for the support of the House for this measure.

4.2 p.m.

Mr. Barney Hayhoe: Six weeks ago the House rejected the Second Reading of the Reduction of Redundancy Rebates Bill by 130 votes to 129. I am not sure whether it was entirely the eloquence and arguments that we deployed from the Opposition side of the House, or the fact that the Prime Minister and the Chancellor of the Exchequer were absent unpaired, that led to the defeat, but for the first time since 1888 a Government were defeated on a Second Reading.
Now the Government have brought in another Bill and, although less obnoxious in form in certain respects, it is perhaps just as poisonous in effect. The question that we posed last time was "Why have it at all? "That question remains unanswered.
The Bill has not been asked for by Jack Jones, nor by Tom Jackson, nor any of the other puff merchants for the Labour Party—I am thinking of their comments on radio recently. Certainly the CBI does not want it. Who does want it?

Mr. Graham Page: Evidently the Labour Party does not want it. Has my hon. Friend not noticed the serried ranks on the Benches opposite?

Mr. Hayhoe: I imagine that Labour Members have other things to contemplate. We are not discussing unemployment, but perhaps many of them are contemplating the unemployment that will face them as a result of events later this week and next month.
The public expenditure arguments are the only arguments that the Minister

tried to deploy, but what he said was fatuous. The words that I used in the radio broadcast were taken straight from what the then Minister of Labour, Mr. Gunter, said on Second Reading of the original Act:
The Redundancy Fund itself will be quite separate from the National Insurance Fund and will be used solely to finance redundancy payments, not for any other purpose."— [Official Report, 26th April 1965; Vol. 711, c. 44.]
That is clear, and it is also clear that it was not intended that the legislation should be used as a back-door way of collecting revenue from industry.
The Minister of State said that employers had to make a contribution as a result of the package, and presumably the contribution that he had in mind was that they should get less rebate while continuing to pay the levy to the Redundancy Fund at the previous level. I understand that the difference is the equivalent of 0·03 per cent. If the object of the Bill is to levy this charge, equivalent to 0·03 per cent. more on the general levy than the level of rebate justifies, it is a nonsense in the context of a package which also imposed a payroll tax of 2 per cent.
The Minister seems to have forgotten that the package included a proposal for making a surcharge of 2 per cent. on national insurance contributions. That was asking employers to make a contribution with a vengeance. It was sucking out £1 billion from the resources available to industry. His suggestion that 0·03 per cent. is significant in that context is fatuous and absurd.
There is no public expenditure case for the Bill except on what I described on Second Reading of the former Bill as a:
wholly pernickety, bureaucratic, legalistic interpretation".—[Official Report, 7th February 1977; Vol. 925, c. 1132.]
If that is the cap that the Minister of State wishes to wear, I shall not deny him its use.

Mr. Harold Walker: Perhaps I have not understood the hon. Gentleman's argument, but is he saying that the amount is insignificant, while accepting that it still counts against public expenditure, or is he persisting with the line that the money cannot and should


not be counted against public expenditure? He should remember that during the 1970– 74 Conservative Government the Department of Employment and the Treasury considered the income and outgoings of the Redundancy Fund to be debits or credits against public expenditure.

Mr. Hayhoe: I made my point clearly in my speech on the last Bill and in the extract from it that I have just quoted. Perhaps the Minister was so busy thinking up his intervention that he did not listen to what I was saying.
I accept that public expenditure Is involved if one takes the most narrow, pernickety, legalistic and bureaucratic interpretation, but if we look at this matter in the context of the effect on industry of the measures announced recently, together with the 2 per cent. surcharge, the Bill makes no sense.
The Government are facing a great political crisis. They are a divided, demoralised and discredited Administration who have run out of steam. The dry rot of Socialism is going through the fabric of their whole being. Yet they come to the House, presumably to rally the Labour faithful—just look at the empty spaces behind the Minister—with this insignificant irrelevance of a Bill.
The Leader of the House also gives priority to this Bill. We could be debating the confidence motion today. The Leader of the House, presumably after consulting the Prime Minister, has decided that we should not debate that issue but that we should deal with this earth-shattering Redundancy Rebates Bill. Perhaps the reason is not the relative priorities, but that the Leader of the House and the Prime Minister want more time to try to cobble together some grubby and shady deal that will enable them to survive on Wednesday night.
We could have had a debate on unemployment or on the difficulties confronting teenagers who have not got jobs. If today had been allocated as a Supply Day, issues of that kind could have been debated.
We could have debated the way in which the Government are imposing by diktat a substantial increase in the price of gas. Is it not interesting that the

Government cannot make a Supply Day available to the Opposition but can find time for this insignificant and irrelevant little piece of legislation?
I do not think that people outside wholly understand how the agenda for this place works. On most days the agenda is determined by the Government. The Opposition have the opportunity of determining what will be discussed only khen a Supply Day is made available to them, or in the very exceptional circumstances of putting down a censure motion, or something of that kind.
Therefore, the Government prefer to use the time of Parliament to debate this kind of issue rather than some of the more substantial issues which worry many people. If they have not the guts to put important matters before the House, they should at least allow the Opposition a Supply Day so that they can do so.
The Leader of the House is strangulating Parliamentary debate on issues by bringing forward such Bills and clogging up the Order Paper with this kind of measure. We see both the Government and the Department of Employment giving this Bill priority. That fact, I suggest, demonstrates their manifest unfitness to remain in charge of the nation's affairs.
The Bill underlines and lends emphasis to the Government's shortcomings. I shall explain why. The defeated Bill was explicit. It followed precedent as well, because changes had been made in rebates. Therefore, the previous Bill, which the House defeated, at least had those virtues. However, this Bill is nonspecific and is an enabling measure. I suppose that all Governments have sought such legislation. They ask the House for broad general powers. I wholly accept that Conservative Governments have done that in the past. But we should recognise the dangers of enabling legislation.
The Minister of State said that it was flexible, that it did not need to go through the cumbersome procedure of a debate in this House. What does it do? It enhances the power of the Executive and diminishes the rôle and power of Parliament.
The changes proposed by the Government in the Reduction of Redundancy Payments Bill were subject to debate and amendment in Committee. If Members


wanted to argue against the 40 per cent. or 41 per cent. which is now proposed, they had the opportunity to do so at the time and in the circumstances in which a change was proposed. But hon. Members will now be given no chance other than accepting or rejecting what the Government put before them. The use of the order procedure means that no amendments can be taken. Therefore, that gives an advantage to the Executive. It is certainly flexible from the Executive's point of view. It is not cumbersome, because the Government do not have to argue their case in detail before Parliament and have it undergo the scrutiny which takes place in Committee.
In my judgment that typifies the Socialist Government's approach to legislation. They prefer enabling legislation. It is much easier to roll it through. Indeed, leading Socialist thinkers have often argued that the right course for an incoming Socialist Government is to have one simple debating Bill and then do practically what they like by order subsequently.
This Bill covers three financial elements. First, there is the maximum level of pay for calculating entitlement. That was covered by Schedule 1 of the original Act and was amended in the Employment Protection Act. That enabled the Government to change the maximum level of pay to be taken into account in determining the amount of redundancy payments to which an individual was entitled. There was the power for changes to be made by order, but by affirmative order. It was necessary for the Government to get a resolution of both Houses of Parliament to do that.
The second financial part of the original legislation was the amount of charge to be levied across industry. That was Section 27 of the 1965 Act. Again, that was amended and new provisions were written into the Social Security Act 1973— Section 122. But again that carried forward the idea that changes would be made by order and that the affirmation of both Houses would be required.
Now I turn to the percentage of rebate which would go to the firms concerned. The figure was written into the 1965 legislation, which was debated and amended in Committee. In 1969 the then Government asked for a change. Six

weeks ago the Government asked for a change. They sought by legislation to modify the amount of rebate. Now we have the Government seeking this enabling legislation, which will not follow the affirmative procedure which was followed for the previous legislation where changes were envisaged from the start—obviously less important changes than the change in the percentage of the rebate which in 1969 was held to be changed only as a result of legislation. Now the Government are trying to achieve that change by way of the negative procedure. That is entirely wrong.
In addition, there is the point made by my right hon. Friend the Member for Crosby (Mr. Page) that, while we, at any rate, can debate a Statutory Instrument which would apply a change in rebate for the United Kingdom, there would be no necessity for a similar debate in this House regarding Northern Ireland. That is a considerable change from the provisions of the original legislation and of the proposal which was before us six weeks ago.
It is typical of the Government that they should be so contemptuous of the rights of the House and of the rights and powers of Back Benchers that, having been defeated, they should come forward with a measure which takes power away from the House, which seeks to avoid the detailed discussions which would follow changes in the amount of the rebate, and which gives greater power to the Executive.
Of course the Bill itself is small and relatively unimportant, insignificant and irrelevant to our economic problems by itself, but I submit that it is highly significant and relevant if we look at how the issue has been handled by the Government. The truth is that the facts of parliamentary life at the moment prevent the Government from steam-rollering through Parliament their damaging devolution Bill and prevent them from even bringing before Parliament their doctrinaire direct labour proposals.
But we see the arrogance of the Socialists and of Socialist Ministers in the way in which they are putting this Bill before the House. Since Parliament has rejected the Bill when it was specific, they come forward with a broad enabling measure seeking to do by the negative procedure what has normally been done


by amending legislation. It is in utter and total opposition to that arrogance, as well as in opposition to the Bill itself, that we shall vote tonight.

4.21 p.m.

Mr. Graham Page: Unlike my hon. Friend the Member for Brent-ford and Isleworth (Mr. Hayhoe), I do not object to this small Bill being discussed in the House now, because it raises a very important constitutional issue. The Minister of State, in his usual charming, courteous and persuasive way, put over what sounded like a modest and reasonable case. Who would have dreamt that in fact he was telling us that the House has already chucked out the Bill once and that, therefore, the Government will in future achieve its aim "under the counter".
The Minister of State is saying that the Government will not ask the House to approve the details of the scheme, but they will do it by order, and by a form of order that he attempted to justify, as so many Governments have in the past, by saying, "We must have flexibility in this matter," that is to say, the Executive must have flexibility. That merely means that the Executive want to go behind the House of Commons and cheat Parliament and the Back-Bench Members. I say that because it is well known that if subordinate legislation is subject to negative resolution only, it has little or no chance of being debated in the House. If subordinate legislation is merely subject to annulment, it comes to the House for debate only by the grace and favour of the "usual channels".
The Back Bencher has little or no chance of bringing a Prayer before the House these days. If he wishes to do so he has to go to the merits Committee—the Statutory Instrument Committee—which sits in the mornings and is very badly attended. There are no votes in such Committees. The Committee merely takes note of an order.
Let us suppose that a negative order is brought forward under Clause 1 of the Bill and an hon. Member puts down a Prayer for its annulment, so it is sent upstairs. An order under the Bill might increase the levy imposed on certain citizens, but when it goes upstairs the Committee may say only, that it has taken

note of the order. This is not the right way to treat the House when discussing increases in levies that may be imposed on certain citizens.
Even if it is by affirmative order, it is difficult enough to cover all the issues in the one and half hours allowed for debating affirmative orders. But at least in that case we have a fixed one and a half hours, whereas with an order that is subject to annulment we cannot debate it after 11.30 p.m., and, if there have been two or three votes after ten o'clock, the debate will be cut down to perhaps three-quarters of an hour.
This endeavour to come before the House and say that the rate of rebate in redundancy payments shall be decided in this way in England, Wales and Scotland is cheating the House. It is impossible, even by an order that is subject to affirmative resolution, to amend the order or debate any amendment to it, and it is certainly impossible with an order that is subject to negative resolution.
The Minister of State said, perhaps by a slip of the tongue, that the order would require the approval of the House. But it will not do so if it is by negative resolution. An hon. Member might see the order on the Order Paper as having been laid before the House and might be quick enough to put down a Prayer to annul it. The Minister said that someone would see it on the Order Paper within a matter of days and put down a Prayer to annul it.
There is a convention that Departments should not make an order operate in less than 21 days from its being laid before the House, but how many orders disregard that convention at present? The 21-day convention is not fully observed, particularly in money orders that come before the House. If it were observed there might be some chance of annulling orders before they come into operation, but in practice that is not possible.
I come now to Clause 2, which deals with Northern Ireland. On the face of it, any order affecting Northern Ireland could be annulled by resolution of Parliament, but in fact under the Northern Ireland Act 1974, no subordinate legislation which is subject to the negative resolution procedure comes before this House at all.
Any subordinate legislation which needs the approval of Parliament is laid


before us with the possibility of a Prayer to annul it. On the face of it, Clause 2 states that the order will require a negative resolution to annul it, but under the Northern Ireland Act 1974 that does not happen. This order for Northern Ireland is not even made by the Secretary of State. It is made by the Department of Manpower Services for Northern Ireland. It is possible, and has been done in the past, for such an order to be required to be made by the Secretary of State, in which case it comes before the House if an hon. Member puts down a Prayer against it. Why did not the Minister adopt that procedure? It is possible to do this under existing legislation, and has been done in recent legislation. He should have adopted that course in this case.
It is preposterous that, having lost the Bill on the first occasion, the Government should bring in another Bill before the House and say that, as they cannot get it through a full House, they will do it by negative resolution procedure, which it is almost impossible to debate on the Floor of the House. I hope that we shall divide against this Bill.

4.29 p.m.

Mr. Douglas Henderson: I agree with the remarks of the right hon. Member for Crosby (Mr. Page) who has brought out some of the most important defects in the Bill. I find it quite astounding that the Government have not learned and have not listened to what was said in the debate on 7th February.
The Government do not command an obedient majority from their followers but have to seek the support of a majority of other hon. Members to sustain their legislation. Against that background they are going completely against that support in reintroducing the Bill in a sneaky and back-door way, as the Minister has done. I was amazed to hear the Minister of State, for whom I have a great regard, say that the rate is not exactly 40 per cent. as it was when the House turned down the Bill last time, but that it will be 41 per cent. That is unworthy of the Minister of State and of any Government who hope to command respect and, on occasions, support from anyone other than their own devoted and obedient followers. They cannot continue in that

spirit and in that light, and that must add a certain piquancy to our discussions later this week. Clearly, unless the Government can show that they can learn the lesson of the views of the House, they have no right to remain in Government, and the sooner they are replaced the better.
At the beginning of the debate the question was posed of who wants the Bill. It seems slightly incongruous, in view of the figures which we have discussed on many occasions, that the Government should be straining so hard to get what the Minister of State now tells me will be about £ 16·2 million from the 41 per cent. of rebate. In a sense, the Government are going for the widow's mite. We have heard that it is not the Government who want the Bill. The Government have said that they regret having to bring the Bill before us. The Bill is certainly not wanted by the other parties in the House. They voted against the Government on the last occasion. One can assume only that the Bill is wanted by the IMF alone.
Following the Chancellor's package of measures last July, we are hearing a different tune from the Government. We are hearing how the Chancellor has £1 billion, £2 billion, or £3 billion— who knows exactly how much? We hear that he will lay this before us in eight days' time. That is the largesse which will be offered to the electorate in the forthcoming election campaign. But here we are arguing over a Bill which, although having been defeated, is reintroduced in substantally the same form and will produce £16·2 million. Once more, that does not seem to me to be the act of a Government who are taking account of the views of the House and of political realities.
The Minister said that the maximum cost to any employer would be three weeks' pay for each employee made redundant. I calculate that with some companies that could be between £200 and £250. That could mean a sizeable pay-out for a small company. Suppose that 10 or 20 people were made redundant in a small company. They would have to be paid out at a time when the company was least able to bear the expense. The Minister says that the expense would not be great, but the incidence of this tax— for that is what it is— comes when the company is already in difficulties.
There is an air of unreality about all this. The Minister cannot expect us to believe that this Bill will not adversely affect companies, particularly small companies. That arrangement demonstrates the saddest aspect of the lack of logic in the Minister's argument.
On Second Reading of the original Bill, the Minister was unable to give any extrapolation of the figures with a rising trend of unemployment. But unemployment in Scotland has increased by about 2,000 a week over the last three months, and figures from the Department of notifications under the Employment Protection Act seem to show that we are talking in terms of at least 1,000 a week for the next three months.

Mr. Harold Walker: The House must be cautious of seeking to establish a correlation between the level of and number of redundancy payments and the level of unemployment. There is no clear correlation. For example, between 1975 and 1976 there was a significant rise in unemployment, and yet the rate of redundancy payments made in 1976 was significantly below that of 1975. I can make a forecast. The Government expect that in 1977 the number of redundancy rebate payments will be between 250,000 and 270,000, but it would be misleading to draw from that conclusions about the level of unemployment. There are so many factors involved that one cannot establish a clear correlation between the two.

Mr. Henderson: I am sure that the Minister would not argue that there is no relationship at all between unemployment and redundancy. It would be interesting to know whether the Department has figures which show whether as a result of the Employment Protection Act, which defines the rights of work-people made redundant, there is a much clearer link between redundancy and unemployment than was hitherto thought to be the case. Perhaps the figures might reveal a pattern which will develop in the future.
No doubt the Minister, like other hon. Members, has been notified about potential redundancies in the construction and engineering industries. We are told that in Scotland Babcock and Wilcox may have up to 1,500 redundancies, with

possibly another 550 in Standard Telephones and perhaps 2,000 to 3,000 in shipbuilding over the next six months. Redundancies are also expected in jute, steel and textiles.
The Scottish economy is facing a very serious situation. I hope that the Minister will not try to underestimate that situation and will not say that it is impossible to calculate what the effect of it on jobs will be. Of course, if the Government plan to contribute less, people in Scotland will have to pay more as the rate of redundancy there goes up. That will take more money out of the Scottish economy, money which will run down the bottomless sink in Whitehall to be squandered as so much money is squandered by Whitehall.
The Minister of State has not convinced me that the Bill is in any way suitable or appropriate. He has not convinced me that the Government have listened to the voice of the House on 7th February. I must therefore recommend my hon. Friends to oppose the Bill tonight.

4.38 p.m.

Sir Anthony Meyer: Until I listened to the Minister of State I was doubtful of the wisdom of my party in deciding to vote against the Bill. But the Minister of State's speech reminded me of a highly respectable figure in a Whitehall farce who is discovered with his trousers down as the curtain goes up on Act II, having been seen at the end of Act I with his hand in the till. My doubts about voting against the Bill are therefore evaporating very rapidly.
I am against the Bill not so much because it is the wrong way to cut Government expenditure. If I were pushed, I am sure that I could think of much worse days of doing that. Certainly the Government have managed to find some. I am against the Bill not solely because it is directly contrary to the Government's much-proclaimed industrial strategy. That strategy never was credible. The only credible form of industrial strategy for this country is to change Governments as quickly as possible.
The additional cost to the employer directly as a result of the Bill may very well prove critical. It may very well prove critical particularly in those industries and in those parts of the country


where the Bill' will be most used. The hon. Member for Aberdeenshire, East (Mr. Henderson) put his finger on this very well, and I echo what he said also with regard to Wales. The effect of the Bill can only be to penalise those parts of the country which are already the worst hit by the problems arising from redundancy. This is a further load imposed on employers, who are already staggering under the impact of the surcharge on employers' contributions, who are already affected by the operations of measures such as the Employment Protection Act, by various other measures which the Government have enacted concerning trade unions, and also by., some of the consequences of legislation concerning equal opportunities.
As to the whole concept of shielding employees from the consequences of redundancy and of trying to ensure security of employment by legislation, the evidence seems to be accumulating that this complex of legislation is now not merely ineffective but beginning to become counter-productive. The concept of redundancy payments, like that of wage-related unemployment benefits and of employment protection, is all right at a time of industrial expansion. In a country such as the United Kingdom, where old industrial habits die hard, it is most important to induce employees to move out of declining firms and industries into growing firms and industries. It could very well be that measures such as these may be helpful in the context of getting people into the frame of mind in which they readily accept the idea of moving from one firm or industry to another.
At a time of declining opportunities and a contracting economy such measures reinforce' the downward spiral and make it more' difficult to move people from unproductive to productive employment. Many firms might be able to stage some kind of recovery if they could shed two or three employees and streamline their operations— those employees would go off elsewhere, and so on— but the impact of having to contribute to the Redundancy Fund and having to make an increased contribution to it under the Bill may have precisely the effect to which the hon. Member for Aberdeenshire, East has just referred. It may be critical in driving a small firm into bankruptcy.
Yesterday I was speaking to a meeting of the National Federation of Self-Employed. The self-employed are very much concerned by the effect that all these measures are having on them and on small businesses in inhibiting their growth and discouraging them from expanding and taking people into new jobs. As the representative of an area body badly affected by a sudden spurt in unemployment— caused very largely by the simultaneous failure or contraction of huge employers, such as the British Steel Corporation, Hawker Siddeley Aviation and Courtaulds— I am more conscious than any other hon. Member of the vital importance of enabling small firms to expand and of encouraging people to become self-employed.
The best way of securing a very rapid diminution in the unemployment figures is by concentrating on what can be done at the very bottom end with the very smallest businesses— the self-employed. The time has come, therefore, not just for tinkering with the existing measures for employment protection and redundancy but for taking a radically new look at the whole complex of legislation that is supposed to govern the creation or the preservation of employment.
It is no good looking to the present government for any such radical new look. The Government in these matters, if not in all others, are completely under the thumb of the unions. The unions themselves, alas, seem to be completely under the thumb of those whose thinking on these matters is totally arthritic.
I am sure that a number of hon. Members who have been in contact with trade union leaders recently have found welcome evidence of some individual trade union leaders thinking in bolder terms than others, but the plain fact is that such views are not effectively represented on the General Council of the Trades Union Congress, and show very little sign at present of making headway in the trade union movement.

The Under-Secretary of State for Employment (Mr. John Golding): I am very pleased with the observations just made on trade union leadership. Does the hon. Gentleman subscribe to the view, put from the Opposition Front Bench, that these leaders are puff merchants?

Sir A. Meyer: I am not quite sure what the Under-Secretary of State means. I was listening very carefully to my hon. Friend the Member for Brentford and Isle-worth (Mr. Hayhoe) and I did not hear him use that particular phrase.
I am making a very serious point. Despite the fact that certain trade union leaders are now well aware of the need for a very radical re-think of our employment policies, and of the fact that intelligent employment policies will produce a permanent increase in the level of employment in this country and a permanent reduction in the level of unemployment, such policies would now necessarily entail an increase in unemployment over the next couple of years. It is simply not possible to run away from this fact.
Whatever party is in power, it will have to accept increased unemployment figures for the next two years or more. The real question is whether at the end of those two years we shall have a permanent reduction in the level of unemployment, or whether, on the contrary, the temporary increase will turn out to be part of a permanent increase in unemployment.
By that acid test the Government have totally failed, because they are incapable of any fresh or original thought on the subject. The present Bill is merely an acceptance of the fact that we have a set of measures which is the most to which the trade union movement would allow the Government to assent. These measures are manifestly failing and have to be tinkered with and in some respects made worse.
Since the Minister of State has said nothing whatever to disabuse me of the belief that this minor measure will now make the Redundancy Payments Act itself a questionable piece of legislation, and make it slightly but significantly worse, I shall have little hesitation in voting against it.

4.49 p.m.

Mr. David Mitchell: Last week we had government by abdication. This week we have government by subterfuge and deviousness.
On 7th February the Government sought to increase the employer's proportion of the cost of redundancy. The House of Commons said "No". Today we have a Bill to enable the Government

to do exactly the same thing. Of course, there are two changes. First, the Bill permits the Government to do it by an order which will come up for approval in the House in the dead of night. The Government might expect to get it through when perhaps the House is thinly attended— not that it would be possible for the Labour Benches to be much more thinly attended than they are at the moment. The Government are taking this course in order to get through what they could not get through by their Bill lost in February.
I was interested to hear the Minister's comment that hon. Members might find this Bill more attractive than its predecessor. He said that he himself did. He said that this procedure would be better than the long and cumbersome procedures and pressures of the House. It means that the Government will be able to introduce legislation by order, approved, if time is found for discussion at all, in the dead of night. The hon. Gentleman is one of the nicest and kindest men in the Government, but I wonder whether he realises the implication of his statement. If the procedures and pressures of the House are a nuisance to a Government, is not that what democracy is about? Is not that what the House of Commons is here for? Is not the view he has expressed getting dangerously near to contempt of Parliament?
It will not be lost on hon. Members that if the procedure outlined by the Government in the Bill, which would enable them to do by order what they were unable to do by debate on the Floor of the House, is followed, such an order could not be amended. It could only be either overturned or not. Contrary to the terms of the Bill which the Government lost on 7th February, there would be no Committee stage for an order, and no opportunity to probe line by line and clause by clause with amendments seeking to change what the Government were proposing. There would be none of that. The House would be left with the straightforward choice of accepting an order or not, and that choice would be given mostly in the dead of night. In effect, therefore, this Bill, unlike its predecessor, would allow the Government to do by subterfuge what they could not do on 7th February.
Secondly, the Bill reduces the extra contribution to be made by employers. It does so only slightly, but we must be grateful. The Government will take only £16½ million out of industry under this Bill instead of the £18 million they proposed to take under the lost Bill. But I believe that we must look at this Bill against the background of the unemployment situation. Although there may be a statistical aberration, to which the Minister referred, one cannot separate unemployment and redundancy, and I shall discuss a key point where the two impinge upon one another. We are considering the Bill against the background of an unemployment figure of over 1⅓ million, which is expected to go to 1¾ million. We have a Government who want employment but do not care for or understand or even want employers.
The Bill piles yet another burden on industry on top of all the other burdens that it already has to suffer. It is difficult to know what is the last straw which breaks the camel's back in this case—whether it is the burden of inflation, which means that industry needs more money in order to achieve the same turnover; whether it is increased corporation tax, which takes money out of the business community at the very time when inflation means that it needs more; whether it is increased income tax; whether it is increased national insurance contributions, or whether it is the new surcharge which is to come in next month—the jobs tax, the surcharge of 2 per cent. on national insurance for everyone in employment.
I do not know which of those burdens is the worst, but the total, with this £16½ million piled on top, will clearly lead to an increase in unemployment. It seems that the Government's slogan could well be "unemployment". Perhaps, if we are to have a General Election soon, they will go to the country on the slogan "We are the party that has managed to double unemployment in only two years. Put us back to continue the good work." I do not know whether that will be the case, but this Bill will certainly add to the unemployment.
Before the Minister sat down, to thunderous applause from both of his supporters in the Chamber, he said that the Bill would have the effect of reducing the public sector borrowing requirement,

because if there were a surplus on the redundancy fund it would go to the Treasury. But we know the policy of the Government as outlined by the Chancellor of the Exchequer in his Budget Statement 12 months ago and reaffirmed by him in the economic debate last summer. He told us that he wanted to see a transfer of resources from the consumer and the Government into industry. Yet we are now being asked to approve a Bill to take another £16½ million out of industry and put it into the hands of the Government. The contradictions are all too clear.
The Minister said that he did not feel it wrong to ask employers to make this additional contribution in the national interest. But is it in the national interest to denude industry of the funds that it needs for investment? Is it in the national interest to denude it of another £161 million which might otherwise go into modernisation or re-equipping? The Bill will lead directly to an increase in unemployment, and I do not see that that is in the national interest.
The truth is that in 1976 and 1977 the burden of carrying the Government has broken the back of industry. As the process has gone on, the number of unemployed and the number of bankruptcies have risen. There is now the additional burden of £16½ million, but it will not be spread thinly across industry. The Minister cannot say "But it will cost each employer only so much". It is being placed specifically on firms which are in the greatest financial difficulty.
No company pays people off unless it has to. No company makes people redundant unnecessarily. On the contrary, machines and empty factories do not make profits; they do not help to earn for shareholder, investor, manufacturer or management. They mean a dead loss. When a company reluctantly decides, because of its financial situation, that it has no option but to pay off some of its employees, at that time of acute financial pressure the Government say "You will pay more towards the redundancy payments than you would have done previously". In effect, when a company has had a bad year and is in its weakest financial position, this scheme will translate that bad year into bankruptcy. I know a number of firms which have had to face the fact that if


they paid off the number of employees they needed to pay off in order to remain in a viable position they would bankrupt themselves because of the Bill.
Another important point has been made to the Government, but with no response—that there is no right under the companies legislation for any company to accumulate reserves against this liability. Therefore, the liability comes along and the company is unable to accumulate free of tax, a fund with which to meet it. What is more, family companies, close companies and companies which under the tax legislation are forced to pay out their profits in dividend are not allowed to retain the profits within their finances unless they are for immediate investment. They are in the position that they cannot retain the funds necessary to meet redundancy payments because they have had to pay out the money to the shareholders.
I have a third reason for opposing the Bill, and that is the lost opportunity, to which my hon. Friend the Member for Flint, West (Sir A. Meyer) referred, to rationalise the whole area of what happens when a man becomes either redundant or unemployed in other ways. The redundancy payments legislation helps most those who may need help least. I go further: it may give no help to those who are most in need.
I shall give two examples to the House. There is the case of a married man with three children living in Scotland who, as the representatives of the Scottish National Party will bear out, is suffering from rising unemployment under the present Government. He finds it difficult to get work in Scotland. He is being driven—as were so many, including my grandfather—to England to seek work. He had the misfortune of changing his job in Scotland a couple of years ago, and now he has lost his job because of rising unemployment. He searches England for a job, finding one, perhaps, in Basingstoke. He has to meet the cost of moving which is much higher, and he has the cost for a while of keeping two homes, yet he has no redundancy payment. He is in great need, but he receives no help.
I am glad that the Minister has returned to the Chamber. I was making the point to him about the lost oppor-

tunity to rationalise all that happens when a man loses his job whether through redundancy or in other ways. I was indicating that there are men who are in great need but who get not one penny from the Redundancy Fund, but other men may receive help.
There is another example from my constituency, where a builder made three men redundant. He did not want to do so, but a contract had ended and demand for construction work was shrinking. He had no option but to pay off the men. There was another building contractor, literally across the road, who took on those three men. They simply crossed the road. I do not know whether they were paid slightly more or less or the same, but I imagine that there was no distinctive difference. They suffered no cost, and they received a substantial sum in redundancy payment. The original builder nearly had a strike on his hands. The other men whom he had not dismissed said "Please, why do you not make us redundant? We could have worked across the road next week for somebody else and we could have had that nice sum of redundancy money in our pockets, yet we got nothing."
Irrationally, the system often pays out according to how lucky one has been. The luckier one has been, the longer one has had a job and has not been out of work, the more good fortune one has and the more one gets in the payout. The greater the misfortune one has, when one has perhaps changed jobs a number of times and one's employer has gone bankrupt under this Government, the more one suffers.

Mrs. Winifred Ewing: Would the hon. Gentleman add to his examples the kind of situation which obtains in Moray and Nairn, where a Government-subsidised bus company is able so to undercut all local contractors in the Grampian Region between Inverness, Peterhead and Aberdeen that they are driven out of business? The undercutting means that the Alexander buses are taking on contracts at a loss. Local contractors are having to allow men to become redundant, but they immediately get jobs with Alexander. Money from the ratepayer's pocket is making that undercutting possible. The result is that small businesses engaged in transport in the area are being driven out of existence.

Mr. Mitchell: I am happy to accept the hon. Member's additional example. I could expound to the House for a long time on other examples of the sort of unfair competition subsidised by the Government and ratepayers which is leading to people being made redundant and, therefore, to claims upon the Redundancy Fund, but I am sure that I would not be allowed to do so because there are others who wish to take part in the debate.
One can think of, for example, the electricity industry. It has fine show- rooms in the High Street, paid for out of electricity charges on the individual consumer, where it sells electrical equipment, heaters, cookers and so on. The Government subsidise that activity, but by their action they bankrupt the small private enterprise electrical contractor and sales company that is operating alongside the showroom.
The Minister looks annoyed. I assure him that if he looks at what is happening he will discover that what I have been describing is the case. He will see that the return on assets, where separate accounting has taken place in some of the electrical industries, is such as would have driven bankrupt any private enterprise company.
If the House wants to look further, there is the direct labour organisations of local authorities. They frequently drive local builders out of business because they act without private accounting, and by using ratepayers' money they are able to make losses and conceal them in a way that no private enterprise firm would be able to use. These examples add to the point made by the hon. Member for Moray and Nairn (Mrs. Ewing). I give one example. In Glasgow it costs more than £4,000 more to build a house through a direct labour department than through private enterprise. These are examples of areas where people are being made redundant as a result of Government activities and therefore calling for additional money from the Redundancy Fund.
I repeat that an opportunity has been lost. I hope that the Minister will take back the Bill—although it may, happily, be defeated again as was its predecessor— and, in the short time still available to him as a Minister in this Government, consider how he can roll together and rationalise redundancy payments and

wage-related unemployment benefits. They are related to the difficulties and the suffering of unemployment, unlike the redundancy payments. I hope that he will look at the whole area of retraining.
If we roll these two things together into a rationalised programme for giving financial and other help to people when they become unemployed, we shall be helping the economy and we shall bring fairness into an area which is so unsatisfactory at present. Above all, we shall be doing something to prevent the growing level of unemployment occasioned by firms having to make payments at their weakest possible moment—when they have to pay people off.

5.9 p.m.

Mr. Fred Silvester: I shall not detain the House for more than a couple of minutes, but I think it is right to draw attention to the distinctive difference between this debate and the one in February. This debate does the House no credit. In February, the Bill presented an opportunity for the House to discuss the redundancy payments scheme. It did so, in a debate which, for all its faults, and even though it lasted for only three hours, got together a number of comments that were worthy of the House. Hon. Members made a number of useful points about the scheme and a number of suggestions.
My hon. Friend the Member for Basingstoke (Mr. Mitchell) and others are trying to inject that same view into this debate. That debate even occurred with two Labour Back Benchers taking part. The debate took place, and, having discussed the redundancy payments scheme and having taken account of the Government's overall economic problems and the fact that they wanted to cut down on our borrowing requirements, the House decided this was not the way to do it. It was a simple matter for the House to take that decision in a useful and valuable debate. We now have that thrown back in our faces, with the result that today we have a debate that is empty, not so much of argument, because we have been trying to keep that up, but of purpose.
One has only to look at the schedule to the Bill to realise what a tawdry measure this is. Even the fractions show what we are talking about. One chunters down the first column dealing with fortieths


until one looks at Item 2 where the fraction suddenly splits into 123/200. The purpose of that is to enable the Minister to put a loin cloth on this dreadful Bill. The Minister is an honourable man and it is unfortunate that he has been put in the position of having to introduce the Bill.
Let me recap on three small points about the Bill, and what we said before and what we say now. It is right for the Government to decide to cut their borrowing if they desire to do so, but it must be right for the House to decide that there are certain areas which they should not touch. If we do not have any latitude in the matter, the House might as well pack up and go home if at all times what the Government say must take precedence.
If the House decides, as it clearly did, not by accident but of its own will, that something should not be done, and if the Government come back in the same Session with identical proposals, disguised though they may be, and spit in the face of the House of Commons, they ought to be thoroughly ashamed of themselves. The arguments put forward in that debate are still true today. They have been rehearsed, and the Government have presented no answer to them.
This Bill is an attempt to cut public expenditure at the expense of companies. The Government are taking money from industrial potential and using it for other purposes, but the argument advanced by the Government to date has been that where cuts have to come, and where economies have to be made, industry at least must be allowed to go forward. The Government have shown again that their priorities slip whenever it suits their political convenience.
Thirdly, and it came out loud and clear in the previous debate, the redundancy rebates system is an integral part of the whole way in which we tackle unemployment. If we tackle it in this way, with a hotchpotch measure that makes matters worse at a time when, as the hon. Member for Aberdeenshire, East (Mr. Henderson) said, companies are at their most vulnerable, we shall do a great disservice.
The Minister comes from an area in which there is substantial unemployment.

I come from an area in which unemployment is even higher. It is not sensible for any Ministers who are concerned, as I am sure present Ministers are, with introducing suitable measures to deal with the unemployment situation to come to the House with legislation which is ill thought out for the circumstances with which we are dealing.
During the past two years we have seen measures which might have had their heart in the right place when they started but which have cumulatively had a deleterious effect on employment prospects. This is becoming increasingly recognised, and if the House is not given an opportunity to debate rationally and calmly and come to a decision, as it did in February, and have an effect on proposed measures, the Government are taking us for a ride, and this exercise is a complete waste of time.

5.14 p.m.

Mr. David Madel: The first thing about this short debate is the note of surprise that has been struck by my hon. Friends that we are debating a measure that has been brought back to us in this way. I think we are all agreed that the Bill is not really necessary. The Minister will recall that in the earlier debate in February the hon. Member for Aberdeenshire, East (Mr. Henderson) raised a question about consultation before the Redundancy Rebates (No. 1) Bill, if I may so call it, was introduced.
The Minister replied to the hon. Gentleman in this fashion:
I return once more to the questions put by the hon. Member for Aberdeenshire, East. It is true that there were no consultations"—
that is before the Bill was introduced—
but the hon. Member would have been fairer had he indicated to the House that in a previous Question he had asked me how many representations had been made."—[Official Report, 7th February 1977; Vol. 925, c. 1182.]
Whether it be consultation or representation, the fact that the Bill was ordered to be printed by the House of Commons on 10th March 1977 has not given industry very much time in which to have consultations and to make representations to the Government on why a second shot should not be made at introducing a Bill of this nature. One would have thought that, having lost the Second Reading of the Bill in February, the Government would


have allowed a considerable period to elapse before making any attempt to bring forward fresh legislation.
The Minister of State, in an open and honest speech— at least most of it was that— talked about how the calculations had been arrived at and indicated that a complicated procedure had been gone through. My hon. Friend the Member for Manchester, Withington (Mr. Silvester) rightly drew attention to the fact that to avoid falling foul of the Public Bill Office and the parliamentary draftsmen the Government in the calculations in the schedule leap from 21/40 to 123/200. Presumably, the Statutory Instrument implementing a change in the redundancy rebates will cite which set of fractions in the schedule to the Bill is to be substituted in Schedule 5 of the Great Britain Act and Schedule 6 of the Northern Ireland Act. We no doubt have to wait until the Statutory Instrument is introduced to see which fraction is used.
Secondly, mention has been made of why 41 per cent. has been used in one of the calculations when all the other percentages go up in multiples of five, from 35 per cent. minimum to 80 per cent. maximum. Again, I assume that 41 per cent. has been arrived at because the Government did not want to fall foul of the parliamentary draftsmen and the Public Bill Office, but we should like an assurance that if the Bill ever gets on to the statute book, before the Government start tinkering around with these percentages, industry, and especially small businesses, will be properly consulted.
The Bill refers in the Explanatory and Financial Memorandum to the effects of the Bill on public service manpower and says:
The changes in public service manpower resulting from the Bill are expected to be minimal.
In the original Bill it said:
No changes in public service manpower are expected to result from the Bill.
I assume that the reason for that is that, because of the new calculations and the rather complicated 41 per cent. calculation that has to be made, extra work will be necessary and more time may be needed and that may lead to more people having to be employed.
A number of points have been reiterated in the speeches today, and I

want to emphasise one point made by my hon. Friend the Member for Basingstoke (Mr. Mitchell). He touched on it today, but he went into it in greater detail on the previous occasion, and it is as relevant today as it was on 7th February. My hon. Friend referred to the contingent liability of small firms and said:
It is a liability against which a firm is not allowed to make a reserve."—
that is the liability for redundancy payments—
It is a liability that cannot be entered in the accounts, although it is clearly an expenditure that will have to be met at some stage. There is a strong case for the Minister saying to the Government that there should be an allowance in terms of companies providing reserves for this purpose. That could be mixed in with the way in which the Chancellor deals with the system of stock relief, which is offset against profit. I do not propose to enter into the details, only to say that representations should be made to the Treasury." — [Official Report, 7th February 1977; Vol. 925, c. 1148.]
My hon. Friend was specific, but when the Minister wound up the debate on that occasion no answer was given to my hon. Friend's question. Assuming that the Government can stagger on, we are entitled to know whether the Department of Employment has drawn this matter to the attention of the Chancellor, who in eight days' time may have an opportunity to make some alterations along the lines mentioned by my hon. Friend on 7th February. It is a point put to us since the debate took place. There has been no answer from the Government. Today provides an opportunity for that answer. There is certainly an opportunity to do something when the Budget comes before us next Tuesday.
The negative order procedure has been touched on in relation to the three elements in the Redundancy Fund which must be kept in balance. By Section 86 of the Employment Protection Act there is:
the general level of earnings … the national economic situation and … such other matters as
the Secretary of State
thinks relevant.
The way the Government propose to introduce this legislation is via the negative procedure, but changes to the other elements I have mentioned can be brought about by affirmative resolution and according to specific criteria. As we


see it, the new form would allow changes in the level of rebate which would be subject only to the negative resolution. No criteria for change are offered. Many speeches have drawn attention to this issue. There is an opportunity for the Government to think again about it.
When the Minister began his speech he said that in due course it might be possible for higher levels of redundancy rebates to be paid. This debate gives us another chance to look more widely into the whole question of redundancy payment provision. When we won the vote on 7th February we hoped that the Government would allow a considerable time to elapse before attempting anything like this again, not least because we invited them to think more deeply and consult more widely on this issue of redundancy payment provision.
I leave the Government with some thoughts and suggestions on this subject and draw their attention to the Continental situation. I hope, even at this late stage, that they will look at these matters rather than charge on with the Bill, or attempt to do so. They will agree that there is little sign of the Redundancy Payments Acts since 1965 having reduced collective resistance to changes entailing redundancy. They might also agree that there is not much evidence of lump sum payments helping redundant workers to find better jobs by enabling them to look round at leisure and make a considered choice of a new job.
Equally, there is no evidence of payments unnecessarily prolonging periods of unemployment or of their being expended in an irresponsible way. Payments are neither more nor less than financial compensation for loss of job, which is only tenuously and indirectly linked to the cost of redundancy. The Government ought to discover whether increased weekly benefits for the unemployed would be a more equitable form of financial compensation for loss of job and would be more likely to contribute to a more relaxed and rational approach to job-seeking.
If we look at the situation up to 1976 we find that generally the employment service had succeeded in placing about 15 per cent. to 20 per cent. of those laid off in major redundancies. That propor-

tion has not increased very much in the past 20 years, although there are signs at last that special on-site services where there is mass redundancy are being more effective. Government retraining is considered by few and appeals to fewer people. It has been taken up by only a relatively small number of those made redundant. It is hoped that the latest figure will show an improvement.
What we are worried about is the provision to assist in geographical transfers. This is even less generally known and used than are the training provisions. On the Continent there are four alterations, and measures which I invite the Government to consider before proceeding further with this Bill. On the Continent a great deal of resources and much expertise are devoted to placement training and assistance with geographical transfer with regard to the labour market generally and the internal labour markets of enterprises. Secondly, greater protection is given in existing jobs for those employees who suffer most from redundancy and who are most difficult to employ, particularly the older workers.
Thirdly, the promotion of manpower planning within enterprises and the development of an agreed social plan is there to cope with the need for redundancy. Fourthly, although the Government have put effort into their job-creation activities, some of this effort, alas, has not been very effective. More attention and greater resources are devoted to effective job creation on the Continent than in this country.
There is, of course, a close relationship between unemployment benefit and redundancy payments. The two are inextricably entwined. Having fallen down on 7th February, the Government should look again at this Bill, at what I have said about the background to redundancy payments, what the situation is in the EEC countries, and to remember that there is no pressure for the Bill from industry, small or large businesses, or from the unions.
We might ask "From whence cometh the pressure?" Is it only that the Government want to salvage their own pride? If so they are going about it the wrong way. They would have been able to perform a much greater service to the nation and to the House if they had said


"We are spending six months thinking about this question" rather than charging ahead with a Bill which is so complicated and unnecessary.

5.25 p.m.

The Under-Secretary of State for Employment (Mr. John Golding): The hon. Member for Bedfordshire, South (Mr. Madel) referred to the fact that the previous Second Reading of this Bill was the first occasion since 1888 that a Bill has been lost on Second Reading. I accept the entire responsibility. My former colleagues in the Whips' Office share that view. The truth is that I am accident prone, having been hit by a bus and lightning, among other minor disasters. To lose a Bill after my first speech at the Dispatch Box was an event which should have been readily foreseen by the Deputy Chief Whip sitting here next to me, who should have known better.
Losing the Bill was not the only mistake I made that evening. I feel bound to report a bad error concerning redundancies in Northern Ireland which I have had to correct in a letter to the hon. Member for Harrow, West (Mr. Page). In that letter I said:
On 7th February— which turned out to be a black night all round for us—I quoted an estimated 'redundancy rate in 1977– 78 of 31,000 and of approximately 33,000 in 1976– 77. I shall try to let the hon. Member have more precise figures'.
In the event it appears that I gave you false redundancy figures; those that apply in this case are much less, 8,000 for 1976–77 and 6,500 for 1977– 78.
I apologise to the House for that mistake.
The hon. Member for Brentford and Isleworth (Mr. Hayhoe) has a bad habit of being offensive. I do not mind him sneaking off and saying nasty things on the radio about my hon. Friend and me. We are used to it. We are quite ready to put up with it, although it would be better if he would name us rather than leaving us anonymous. I do object, however, to the hon. Member being offensive under the protection of parliamentary privilege to people outside this House. To describe the trade union leaders of this country as "puff merchants"—

Mr. Hayhoe: That was just about Mr. Tom Jackson and one or two colleagues, who, I think, behave as puff merchants for

the Labour Party. I would not apply that term to all trade union leaders.

Mr. Golding: The two gentlemen referred to were Jack Jones—

Mr. Hayhoe: No.

Mr. Golding: I made a careful note. The reference was to Jack Jones and Tom Jackson. They were singled out as names that would be known.

Mr. Hayhoe: This is a question of recollection. The reference to "puff merchants" was to Tom Jackson and others who have been speaking on the radio as public relations protagonists for the Labour Party. I did not include Jack Jones in that, although I accept that I had said earlier that Jack Jones had not demanded this Bill, as far as I knew.

Mr. Golding: No doubt the hon. Member will have the chance to correct Hansard and make certain. For an Opposition Front Bench spokesman on employment matters to describe people of that standing as "puff merchants" is totally irresponsible. We shall not get industrial peace by using intemperate language of that sort.
I say in passing that I do not want to be misunderstood. Members of my union have taken Tom Jackson to task for speaking for the whole of the telecommunications industry. But we should not use intemperate language of that sort under the protection of parliamentary privilege. If the hon. Gentleman is to abuse people, he should do it outside, face to face, so that they can answer back.

Mr. Hayhoe: It is an interesting observation by the Minister that it is a term of abuse to describe someone as an unpaid PR puff merchant for the Labour Party. If in his book that is a term of abuse, so be it.

Mr. Golding: Our recollections differ. The hon. Gentleman will have to go again to the Hansard office to make sure that appropriate corrections are made to the record—a practice to which I am not unaccustomed myself. Let it be a lesson to the hon. Gentleman to be more temperate in his language because, as in the previous debate, when he referred to our Permanent Secretary in terms which he should not have used, he has a bad habit of being carried away when he is at the


Dispatch Box or before a microphone. We advise him to be more conciliatory in his approach.
There is very little that I want to say about the speech of the hon. Member for Brentford and Isleworth. The hon. Member for Manchester, Withington (Mr. Silvester), who was yawning his head off at 4.15, summed up the reaction to the hon. Gentleman's speech.

Mr. Silvester: The yawn had more to do with a four-week old baby in the middle of the night than with my hon. Friend's speech.

Mr. Golding: I should perhaps congratulate the hon. Gentleman, but I do not know how he could have told the difference between the hon. Gentleman and a four-week old baby in the middle of the night.
It was apparent from the speech of the hon. Member for Brentford and Isleworth that, to a large extent, the arguments used in the previous debate had been abandoned. I am glad that the hon. Gentle man has departed from them. He spoke mainly about the technical procedure. I am sure that in Committee this matter will be the subject of long and intensive debate.

Mr. Graham Page: Is the hon. Gentle- man undertaking to make a change in Committee from the negative to the affirmative resolution procedure?

Mr. Golding: Of course I am not, otherwise I should have said so. I have said that it is certain that this matter will be debated at length.
I turn to the speech of the hon. Member for Aberdeenshire, East (Mr. Henderson) —

Mr. Graham Page: The hon. Gentleman cannot pass over in a sentence like that an important constitutional matter which has been raised by every hon. Member who has spoken. He cannot chuck it overboard like that.

Mr. Golding: The answer to that is, who cannot?
We appreciate that the amounts involved are relatively small. The hon. Member for Aberdeenshire, East referred to them as the widow's mite. It is a fact of public expenditure that small amounts

add up to substantial amounts, and that is why ceilings are applied to public expenditure and reductions are suggested in the public sector borrowing requirement.
I wish to deal with the question of consultation. We have received, even after the last debate, no formal representations from the CBI. I was concerned to hear it said in our last debate that I had not considered the representations from the County Councils Association. But it seems that those representations were not sent to me or to my Department. We have received no representations from the association, as we have received no representations from the CBI. Had representations been made, had we refused to consider them, and had we refused to consult if we had been asked by these outside organisations to do so, the hon. Gentleman would have been correct to chide us for it.
Whenever I have been asked to consult on or discuss any issue of this sort, my attitude has been to do so. But we have received no formal representations from the CBI, never mind the County Councils Association.

Mr. Henderson: I am surprised by the hon. Gentleman's remarks. The shortness of notice between publication of the Bill and the date of Second Reading may have something to do with it. However, I do not want to be unfair. The hon. Gentleman has mentioned the CBI and the County Councils Association. What about the TUC? Has not the hon. Gentleman asked the TUC for its opinion on the Bill?

Mr. Golding: No; I have not consulted the TUC on the Bill.

Mr. David Mitchell: Should not the hon. Gentleman have discussed with the TUC a Bill that will increase unemployment?

Mr. Golding: I do not believe that it need necessarily lead to an increase in unemployment; but I must get on. [Interruption.] I was long enough in the Whips' Office to know that when the Deputy Chief Whip frowns at me, I must get on.
It is important that we deal with the question of the difficulties of small firms, but if it is a choice between granting and not granting the temporary employment


subsidy, I shall keep the temporary employment subsidy, because it is the Government measure which has been of greatest assistance in reducing redundancies, not only in Scotland, but elsewhere. That is the best way in which we could have responded since December to this question.
We do not underestimate the importance and gravity of unemployment in Scotland, although we expect fewer rebates to be paid next year. But let me make it clear that the Tory alternative is to increase redundancy. The right hon. Member for Leeds, North-East (Sir K. Joseph) and the hon. Member for Flint, West (Sir A. Meyer), who has apologised for not being present, made it clear that they do not want assistance to go to firms in trouble. If they were on the Government Front Bench, Scotland would be in trouble, because they would refuse financial assistance.

Mr. Henderson: Since the Government are unable to cope with the situation and since the Tories will increase unemployment, does not the hon. Gentleman conclude that the best thing we can do in Scotland is to become independent?

Mr. Golding: That is not a view that I hold. But the hon. Gentleman would carry a heavy responsibility if, by any mischance, members of the Opposition were to be in the Departments of Employment and Industry and refusing assistance to people in Scotland threatened with redundancy.
The Government's policy is to save firms wherever possible. British Leyland was saved with the commitment of £300 million. Chrysler, which is of great importance to Scotland, had £162 million committed, £54 million being saved. The temporary employment subsidy has created 27,682 jobs in Scotland. The hon. Member for Flint, West said that the whole concept of shielding employees proved ineffective, but it has not been ineffective in the British motor car industry or British industry generally, and certainly not in Scotland.
The hon. Member for Basingstoke (Mr. Mitchell) said that we did not want to help employers. In that case, I should like to know what I have been doing day by day when I have been receiving deputations from employers to save their

firms and have assisted in doing so. Day by day we in the Department of Industry and the Department of Employment have constantly met joint deputations of employers and trade unionists begging us to save their firms and their jobs. Whenever possible we have taken the view that it is right to do so at the present time. We are appalled that Opposition Members want to depart from that view.

Mr. David Mitchell: Mr. David Mitchell rose—

Mr. Golding: I shall not give way. The hon. Member for Bedfordshire, South asked a question about contingent liability.

Mr. David Mitchell: On a point of order, Mr. Speaker. When a Minister attacks an hon. Gentleman in the House is it not usual for him to give way to allow that hon. Member to respond?

Mr. Deputy Speaker (Mr. Bryant God-man Irvine): The hon. Gentleman knows that when the Minister is in charge of the Floor it is his actions that are paramount.

Mr. Golding: It is in the interests of brevity, Mr. Deputy Speaker, that I get on. This point has not been raised again with the Treasury, but I shall undertake to do so following the debate.
We believe that the payment of redundancy benefits has reduced resistance to change. Mr. Gunter said on introducing the original Bill:
The purpose of redundancy pay is to compensate a worker for loss of job, irrespective of whether that leads to any unemployment. It is to compensate him for the loss of security, possible loss of earnings and fringe benefits, and the uncertainty and anxiety of change of job."—[Official Report, 26th April 1965; Vol. 711, c. 36.]
I agree with the hon. Member for Bedfordshire, South when he says that we ought to do everything possible to increase placement, training and mobility allowances and to do whatever we can to protect existing jobs and to do more for job creation. I hope that Opposition Members who are constantly attacking the Manpower Services Commission for doing just that very thing will listen to his words.
The hon. Gentleman talked about protecting people in existing jobs. I hope that he will have a word with his right hon. Friend the Member for Leeds, North-East who wants firms to go to the wall


and workers to be declared redundant in the name of classical orthodox economics.

Mr. Graham Page: Before the Minister sits down is he not going to deal with the charge that he is trying to get legislation by negative order instead of bringing it forward in primary legislation?

Mr. Golding: No.

Mr. David Mitchell: Because the Minister cannot.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 220, Noes 183.

Division No.89
AYES
[5.44 p.m.


Abse, Leo
Forrester, John
Mulley, Rt Hon Frederick


Allaun, Frank
Fraser, John (Lambeth, N'w'd)
Murray, Rt Hon Ronald King


Archer, Peter
Freeson, Reginald
Newens, Stanley


Armstrong, Ernest
Garrett, John (Norwich S)
Ogden, Eric


Ashley, Jack
George, Bruce
O'Halloran, Michael


Ashton, Joe
Gilbert, Dr John
Orbach, Maurice


Atkins, Ronald (Preston N)
Ginsburg, David
Orme, Rt Hon Stanley


Atkinson, Norman
Golding, John
Ovenden, John


Bagier, Gordon A. T.
Gould, Bryan
Owen, Rt Hon Dr David


Barnett, Rt Hon Joel (Heywood)
Gourlay, Harry
Palmer, Arthur


Bates, Alf
Graham, Ted
Park, George


Benn, Rt Hon Anthony Wedgwood
Grant, George (Morpeth)
Parker, John


Bishop, E. S.
Grocott, Bruce
Pavitt, Laurie


Blenkinsop, Arthur
Hamilton, James (Bothwell)
Perry, Ernest


Booth, Rt Hon Albert
Hardy, Peter
Phipps, Dr Colin


Bottomley, Rt Hon Arthur
Harrison, Walter (Wakefield)
Price, William (Rugby)


Bray, Dr Jeremy
Hattersley, Rt Hon Roy
Radice, Giles


Brown, Hugh D. (Provan)
Healey, Rt Hon Denis
Rees, Rt Hon Merlyn (Leeds S)


Brown, Robert C. (Newcastle W)
Heffer, Eric S.
Richardson, Miss Jo


Buchan, Norman
Hooley, Frank
Roberts, Albert (Normanton)


Buchanan, Richard
Hoyle, Doug (Nelson)
Roberts, Gwilym (Cannock)


Butler, Mrs Joyce (Wood Green)
Huckfield, Les
Robinson, Geoffrey


Campbell, Ian
Hughes, Robert (Aberdeen N)
Roderick, Caerwyn


Canavan, Dennis
Hughes, Roy (Newport)
Rodgers, George (Chorley)


Cant, R. B.
Hunter, Adam
Rodgers, Rt Hon William (Stockton)


Carmichael, Neil
Irvine, Rt Hon Sir A. (Edge Hill)
Rooker, J. W.


Carter, Ray
Irving, Rt Hon S. (Dartford)
Roper, John


Castle, Rt Hon Barbara
Jackson, Miss Margaret (Lincoln)
Rose, Paul B.


Clemitson, Ivor
Janner, Greville
Ross, Rt Hon W. (Kilmarnock)


Cocks, Rt Hon Michael
Jay, Rt Hon Douglas
Sandelson, Neville


Cohen, Stanley
Jeger, Mrs Lena
Sedgemore, Brian


Coleman, Donald
Jenkins, Hugh (Putney)
Selby, Harry


Conlan, Bernard
Johnson, James (Hull West)
Shaw, Arnold (Ilford South)


Cook, Robin F. (Edin C)
Johnson, Walter (Derby S)
Sheldon, Rt Hon Robert


Cowans, Harry
Jones, Alec (Rhondda)
Shore, Rt Hon Peter


Cox, Thomas (Tooting)
Jones, Dan (Burnley)
Silkin, Rt Hon John (Deptford)


Crawshaw, Richard
Judd, Frank
Silkin, Rt Hon S. C. (Dulwich)


Crowther, Stan (Rotherham)
Kaufman, Gerald
Silverman, Julius


Cryer, Bob
Kelley, Richard
Small, William


Cunningham, G. (Islington S)
Kerr, Russell
Smith, John (N Lanarkshire)


Cunningham, Dr J. (Whiteh)
Kilroy-Silk, Robert
Spearing, Nigel


Davidson, Arthur
Kinnock, Neil
Spriggs, Leslie


Davies, Bryan (Enfield N)
Lamborn, Harry
Stallard, A. W.


Davies, Denzil (Llanelli)
Lamond, James
Stewart, Rt Hon M. (Fulham)


Davies, Ifor (Gower)
Latham, Arthur (Paddington)
Stoddart, David


Davis, Clinton (Hackney C)
Lever, Rt Hon Harold
Stott, Roger


Deakins, Eric
Lewis, Arthur (Newham N)
Strauss, Rt Hon G. R.


Dean, Joseph (Leeds West)
Lewis, Ron (Carlisle)
Summerskill, Hon Dr Shirley


Dell, Rt Hon Edmund
Lipton, Marcus
Swain, Thomas


Dempsey, James
Lomas, Kenneth
Taylor, Mrs Ann (Bolton W)


Doig, Peter
Loyden, Eddie
Thomas, Jeffrey (Abertillery)


Dormand, J. D.
Luard, Evan
Thomas, Mike (Newcastle E)


Douglas-Mann, Bruce
Lyon, Alexander (York)
Thomas, Ron (Bristol NW)


Duffy, A. E. P.
McCartney, Hugh
Thorne, Stan (Preston South)


Eadie, Alex
McDonald, Dr Oonagh
Tierney, Sydney


Edge, Geoff
McElhone, Frank
Tinn, James


Ellis, John (Brigg &amp; Scun)
MacFarquhar, Roderick
Tomney, Frank


English, Michael
MacKenzie, Gregor
Tuck, Raphael


Ennals, David
McMillan, Tom (Glasgow C)
Urwin, T. W.


Evans, Fred (Caerphilly)
Madden, Max
Varley, Rt Hon Eric G.


Evans, Ioan (Aberdare)
Magee, Bryan
Wainwright, Edwin (Dearne V)


Ewing, Harry (Stirling)
Mallalieu, J. P. W.
Walker, Harold (Doncaster)


Faulds, Andrew
Marquand, David
Walker, Terry (Kingswood)


Fernyhough, Rt Hon E.
Marshall, Dr Edmund (Goole)
Ward, Michael


Fitch, Alan (Wigan)
Maynard, Miss Joan
Watkins, David


Flannery, Martin
Mellish, Rt Hon Robert
Watkinson, John


Fletcher, Ted (Darlington)
Mendelson, John
Weetch, Ken


Foot, Rt Hon Michael
Molloy, William
Weitzman, David


Ford, Ben
Morris, Rt Hon J. (Aberavon)
Wellbeloved, James




White, Frank R. (Bury)
Williams, Sir Thomas (Warrington)
Young, David (Bolton E)


White, James (Pollok)
Wilson, Alexander (Hamilton)



Whitehead, Phillip
Wilson, Rt Hon Sir Harold (Huyton)
TELLERS FOR THE AYES:


Whitlock, William
Wise, Mrs Audrey
Mr. Joseph Harper and


Williams, Rt Hon Alan (Swansea W)
Woodall, Alec
Mr. Peter Snape.


Williams, Rt Hon Shirley (Hertford)
Woof, Robert





NOES


Adley, Robert
Grant, Anthony (Harrow C)
Nelson, Anthony


Alison, Michael
Gray, Hamish
Neubert, Michael


Arnold, Tom
Grieve, Percy
Onslow, Cranley


Atkins, Rt Hon H. (Spelthorne)
Grist, Ian
Oppenheim, Mrs Sally


Bain, Mrs Margaret
Hall, Sir John
Page, Rt Hon R. Graham (Crosby)


Baker, Kenneth
Hannam, John
Page, Richard (Workington)


Banks, Robert
Harrison, Col Sir Harwood (Eye)
Parkinson, Cecil


Beith, A. J.
Hastings, Stephen
Penhaligon, David


Bennett, Sir Frederic (Torbay)
Havers, Sir Michael
Percival, Ian


Bennett, Dr Reginald (Fareham)
Hayhoe, Barney
Price, David (Eastleigh)


Berry, Hon Anthony
Henderson, Douglas
Prior, Rt Hon James


Biffen, John
Higgins, Terence L.
Pym, Rt Hon Francis


Biggs-Davison, John
Hordern, Peter
Raison, Timothy


Boscawen, Hon Robert
Howe, Rt Hon Sir Geoffrey
Rathbone, Tim


Bottomley, Peter
Hunt, David (Wirral)
Rawlinson, Rt Hon Sir Peter


Bowden, A. (Brighton, Kemptown)
Hurd, Douglas
Rees, Peter (Dover &amp; Deal)


Braine, Sir Bernard
Hutchison, Michael Clark
Renton, Rt Hon Sir D. (Hunts)


Brittan, Leon
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Rhodes James, R.


Brooke, Peter
Jessel, Toby
Ridley, Hon Nicholas


Brown, Sir Edward (Bath)
Johnson Smith, G. (E Grinstead)
Ridsdale, Julian


Bryan, Sir Paul
Johnston, Russell (Inverness)
Rifkind, Malcolm


Budgen, Nick
King, Tom (Bridgwater)
Roberts, Michael (Cardiff NW)


Burden, F. A.
Kitson, Sir Timothy
Rodgers, Sir John (Sevenoaks)


Butler, Adam (Bosworth)
Knox, David
Rossi, Hugh (Hornsey)


Carlisle, Mark
Langford-Holt, Sir John
Rost, Peter (SE Derbyshire)


Chalker, Mrs Lynda
Latham, Michael (Melton)
Royle, Sir Anthony


Churchill, W. S.
Lawrence, Ivan
Sainsbury, Tim


Clark, Alan (Plymouth, Sutton)
Lawson, Nigel
Shaw, Michael (Scarborough)


Clark, William (Croydon S)
Lester, Jim (Beeston)
Shersby, Michael


Clarke, Kenneth (Rushcliffe)
Lewis, Kenneth (Rutland)
Silvester, Fred


Cockcroft, John
Lloyd, Ian
Sinclair, Sir George


Cooke, Robert (Bristol W)
Loveridge, John
Skeet, T. H. H.


Cope, John
Luce, Richard
Speed, Keith


Cormack, Patrick
McAdden, Sir Stephen
Spicer, Michael (S Worcester)


Costain, A. P.
McCrindle, Robert
Stainton, Keith


Crouch, David
McCusker, H.
Stanbrook, Ivor


Davies, Rt Hon J. (Knutsford)
Macfarlane, Neil
Stanley, John


Dean, Paul (N Somerset)
MacGregor, John
Steel, Rt Hon David


Douglas-Hamilton, Lord James
Macmillan, Rt Hon M. (Farnham)
Stewart, Rt Hon Donald


Drayson, Burnaby
McNair-Wilson, M. (Newbury)
Stewart, Ian (Hitchin)


du Cann, Rt Hon Edward
McNair-Wilson, P. (New Forest)
Stokes, John


Durant, Tony
Madel, David
Stradling Thomas, J.


Dykes, Hugh
Marten, Neil
Tapsell, Peter


Ewing, Mrs Winifred (Moray)
Mates, Michael
Taylor, R. (Croydon NW)


Fairgrieve, Russell
Mather, Carol
Tebbit, Norman


Farr, John
Maudling, Rt Hon Reginald
Temple-Morris, Peter


Finsberg, Geoffrey
Mawby, Ray
Thatcher, Rt Hon Margaret


Fisher, Sir Nigel
Maxwell-Hyslop, Robin
Thorpe, Rt Hon Jeremy (N Devon)


Fletcher, Alex (Edinburgh N)
Mayhew, Patrick
Townsend, Cyril D.


Fookes, Miss Janet
Meyer, Sir Anthony
van Straubenzee, W. R.


Forman, Nigel
Miller, Hal (Bromsgrove)
Wainwright, Richard (Colne V)



Mills, Peter
Wakeham, John


Fowler, Norman (Sutton C'f'd)
Miscampbell, Norman
Walder, David (Clitheroe)


Fraser, Rt Hon H. (Stafford &amp; St)
Mitchell, David (Basingstoke)
Walker, Rt Hon P. (Worcester)


Fry, Peter
Moate, Roger
Wall, Patrick


Gardiner, George (Reigate)
Moore, John (Croydon C)
Walters, Dennis


Gardner, Edward (S. Fylde)
Morgan, Geraint
Warren, Kenneth


Gilmour, Rt Hon Ian (Chesham)
Morgan-Giles, Rear-Admiral
Weatherill, Bernard


Gilmour, Sir John (East Fife)
Morris, Michael (Northampton S)



Goodhew, Victor
Morrison, Charles (Devizes)
TELLERS FOR THE NOES:


Goodlad, Alastair
Morrison, Hon Peter (Chester)
Mr. Spencer Le Marchant and


Gow, Ian (Eastbourne)
Mudd, David
Sir George Young,


Gower, Sir Raymond (Barry)
Neave, Airey

Question accordingly agreed to.


Bill read a Second time.


Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — NUCLEAR INDUSTRY (FINANCE) BILL

Not amended (in the Standing Committee), considered.

Clause 1

GOVERNMENT GUARANTEE OF COMPANIES' BORROWING, ETC.

5.58 p.m.

Mr. David Penhaligon: I beg to move Amendment No. 1, in page 1, line 12, leave out subsection (2).

Mr. Deputy Speaker (Mr. Oscar Murton): With this it will be convenient to discuss Amendment No. 4, in page 1, line 18, at end insert—
'() The specified circumstances mentioned in subsection (2) above shall be those set out by the Secretary of State by order (made by statutory instrument and subject to negative resolution by the House of Commons) within six months of the coming into force of this Act.'

Mr. Penhaligon: In the view of the Liberal Party, in many ways this provision is the whole guts of and certainly refers to the real controversy in this Bill. We as a party for some time have been gradually increasing our doubts about the wisdom of a number of aspects of nuclear power, and this subsection refers to the issue which disturbs us most at the moment.
As it stands, the clause in effect gives permission to the British nuclear fuel industry to make guarantees to overseas customers to repay them sums of money which they will advance to us for the building of the reprocessing plant at Windscale. Our basic and fundamental objection is that this seems a rather peculiar way of legislating—making guarantees for sums of money for a project which is the subject of a public inquiry at the moment.
It is our view that the decision on reprocessing is a political one, but one that we hope will be based on the facts. Until a public inquiry has taken place, we do not believe that there are sufficient facts available on which to base the decision.
6.0 p.m.
We wish to remove this subsection so that when the House does discuss the

matter it will be better informed about the arguments for and against a nuclear reprocessing plant at Windscale. The real worry of the Liberal Party in relation to reprocessing is the increased chances of the proliferation of plutonium throughout the world, particularly in countries without access to that substance.
When this matter was debated in Committee we asked the Minister just how a guarantee could be made that the plutonium could be kept under lock and key, so to speak. We asked for an assurance that tremendous efforts would be made to ensure that the "book-keeping" on plutonium was such that it could not be taken by a third party on an illegal basis.
The scientists believe that the best bookkeeping they can do on this matter would give an error of about 2 per cent. The charge of plutonium required for a single fast breeder reactor is of the order of 1·1 tonnes. Two per cent. of 1·1 tonnes means that for a single charge for a single fast breeder reactor the accuracy of the bookkeeping is plus or minus 22 kilograms. People who are experts suggest that the minimum quantity of plutonium needed for any nuclear weapon is 6 kilograms. Therefore, it would appear that the maximum error which would not be detected would be the disappearance of 20 kilograms of plutonium. No one would know, yet that would be enough to make three weapons.
Far larger quantities of plutonium at this moment are being generated in thermal reactors. The average charge for a thermal reactor is 25 tonnes of uranium 253 and 238. Even when that particular reaction stops, the vast bulk of what is left in the reactor is uranium 235 and 238. Out of the original 25 tonnes I understand that about 24 tonnes are left. The only reason why reprocessing is considered at that particular stage is that it is no longer possible to make the pile go critical. In other words, reaction stops.
That reminds me of a simple physics experiment that many of us performed at school. Two different plates were put in acid and as a result a bulb lit up. When the bulb went out the reason was the oxidisation of the plates. The particular skill involved here is making sure that the chemical reaction does not foul itself up. So it is with thermal reactors. After a period of about two years the


reaction stops because the by-product of the reaction is such that in effect it can no longer be started up.
If one reprocessed 25 tonnes of two sorts of uranium and the by-products, one could release the uranium and presumably use it again. It is the by-products that are really crucial. Even on one charge of one nuclear reactor there are 250 to 350 kilograms of plutonium. It is the belief of many people, including the Liberal Party, that reprocessing on the scale envisaged by some will make available to the world very large quantities of plutonium in a relatively short period. It will not just be the plutonium from the fast breeder reactors to which I have referred, but there will be substantial quantities also from the thermal reactors.
The Bill, if implemented, will mean that the overseas contract, about which so much is being said in the Press, will begin the process towards extraction of these materials. The particular guarantee most likely to come to fruition in the near future is the one from Japan. This is a guarantee against a sum of £400 million offered by the Japanese Government as an advance payment to British Nuclear Fuels Limited to build the reprocessing plant. A lot of questions are being asked about the guarantees in these circumstances.
If the plant does not get planning permission, the Japanese will get their money back, and no one would dispute that. If the plant is built and is discovered not to function for numerous reasons, the Japanese will not have their money returned. Some questions have been asked about the right of the Japanese and other overseas countries to information giving the precise technical reasons why the plant had failed and they had lost their £400 million. The assurance was given that they would have no right to any technical information as they would not be involved in any technical decisions in building the project. I can never recollect Governments overseas showing such remarkable generosity with such a large sum of money. The Japanese are desperate to get reprocessing out of their own country, not least because the plant they are trying to build does not seem to work.
The third possibility is of the plant being half built with the Japanese money,

and the Americans then using their power to ban the transfer of what was their uranium 235 and 238 to third countries. The vast bulk of uranium came originally from America and in the contracts under which they sold to other countries there was the power to say "No" to that country selling or transferring the uranium to third countries.
I am told that a combination of the various groups on 9th March petitioned the United States Energy Research and Development Administration in what is called a rule-making hearing at which discussions about the re-processing of nuclear fuel originate in the United States. As recently as last year the Ford Administration introduced temporary bans on the transfer of such fuels from Japan and Spain to Windscale. That ban was rescinded, but there is a good possibility—and a few people think a likelihood—that the ban will be reimposed, and therefore the Japanese will not be allowed to send the material to the United Kingdom in any case.
In that event what will happen to the £400 million? The Government must have applied their mind to this question. Will the Americans pay damages if certain decisions are taken? That is hardly a possibility. Will Britain return to Japan the money lent to us, money that we have already spent, or will Japan take the view that that money will be lost?
There is enormous anxiety in the United States over the subject of reprocessing in Western Europe, mainly at Windscale and in France. We all know that very great efforts have been made by the United States and indeed by ourselves to stop the spread of plutonium. If the material to which I have referred is released from what is left in the reactor, enormous quantities of this material will exist and it will be available for people to use almost as they choose.
I have tried to outline in brief the proliferation problem. It is not only a matter of third or fourth countries obtaining this material. I am told that, given a source of plutonium, any country could obtain the services of nuclear advisers and out of that material make a bomb. That is one important side of the proliferation question. Tht other aspect that worries me equally is what will happen if


guerrillas in any country manage to obtain a small quantity of this material and use it in guerrilla warfare in a way that the world has not yet experienced.
The main argument advanced in favour of this form of nuclear reprocessing is on the lines "If we do not do it, somebody else will." That has been the defence of the prostitute over the centuries. I do not dismiss that argument out of hand, but experience leads us to think differently. The United States has built two or three reprocessing plants within the last decade, every one of them has been shut down, and the losses have been enormous. The Japanese have been trying to do their own reprocessing and their plant does not work. The plant leaks and cannot be used.
The only people who appear to have a plant working on any scale are the French. They have already entered into commitments extending that equipment to the maximum capacity. There is little likelihood of the French building enough equipment to grab all the contracts, if I may put it that way.
It is nonsense for the House to approve these borrowing powers when the project to which the expenditure refers is in the process of public inquiry about safety and a number of other factors. This House will abdicate its responsibility if it does not take those matters strongly into consideration. The matter of reprocessing is a political decision, and the more we can base that decision on facts, the better. The inquiry has been set up to try to elicit all the factors from arguments for and against, and it is absurd for this House to pass judgment before we have heard the arguments.
6.15 p.m.
The Minister was asked on Second Reading whether we were to sign any more contracts for the reprocessing of nuclear waste from third countries. We already have substantial quantities of such material in the United Kingdom. We require an answer to that question before deciding how to dispose of this material. Many arguments can be put against the continued importation of nuclear waste until we decide what we are to do about the situation. Relatively speaking, there is no great problem in dealing with the material that is already in the United

Kingdom, because we have a substantial number of ponds where this material may be watched, cooled and kept under careful conditions. That material can continue to be dealt with in ponds until we have reached a final solution on the disposal of 600 or 700 kilograms of waste.
Are the British Government contemplating further contracts for the storage of other countries' waste? I do not understand why it is regarded as so important for Britain to store other people's waste. It is said that the Japanese do not wish to store their own waste because they are in an area of high geological activity and are worried that escapes of this material could lead to great loss of life. No doubt the Japanese are right to be worried about these factors, but they are building their own power stations in which these materials are used and have also built their own reprocessing plants. I suggest that the Japanese should seek to cope with three units of this material instead of the present figure of two units.
I do not fully understand the pressures on this country to import this material. There is the slightly cynical view held by some that the final solution in getting rid of this waste is a long way off—and that certainly applies to a solution that is acceptable to public opinion. It is said that the Japanese take the view "If there is to be a dump, it is better that it should be in the United Kingdom than in Japan."
I have tried to give an outline of my reasons for wishing to delete subsection (2). We are also discussing Amendment No. 4, which seeks to provide a similar level of protection, because it will make the legislation subject to negative resolution by the House of Commons. That would bring the political decision back to the Floor of the House, so that these matters may be debated and considered against the knowledge that is then at our disposal. It is precisely for that reason that we are asking this. Until the reprocessing inquiry at Windscale has been completed, we do not have the best information to make a logical decision.

Mr. Arthur Palmer: The hon. Member for Truro (Mr. Penhaligon) used the word "we". Is the Liberal Party officially opposed to nuclear power stations?

Mr. Penhaligon: No. The Liberal Party is not officially opposed to power stations. I mean nuclear power stations. To be against all power stations would be a difficult policy to adopt. We are saying that because of our luck in finding other sources of material and because of the potential energy saving that exists through massive schemes of insulation and the improvement of the efficiency of transport equipment, the country does not require a final decision to be made about the use of nuclear power yet. There is a breathing space and it can be used for the House to concentrate its mind on the facts as they are revealed, and not all the facts have yet been revealed. The House can then come to a logical decision.
It is for those reasons that I move the amendment. It is intended to enable the House to make a decision after the public inquiry has been held, and I hope that it will receive widespread support.

Mr. Frank Hooley: We are told that the state of the economy is now such that we must guard and watch over every pound of proposed public expenditure. Yet in such a situation we are presented with a Bill that cheerfully proposes a commitment of £1,00) million of taxpayers' money in an area that is technologically and politically highly controversial. I doubt whether anyone knows exactly what direction the argument will take and what policies will be deployed over the next 10 years. Yet the Bill proposes that the British taxpayer should bear the burden of £1,000 million, £500 million for existing work and another £500 million for work that is dubious in many respects—some of which have been mentioned by the hon. Member for Truro (Mr. Penhaligon)—and which carries the greatest possible technical, political and international uncertainties.
I do not wish to go over the technical questions that have been touched upon by the hon. Member for Truro. It is generally known that there are great and considerable technical controversies about reprocessing. There is great political controversey over whether it is necessary and about its political implications. America cannot be regarded as a technologically backward country, yet the American Government appear to have suspended judgment on reprocessing for a period and are using possibly rather strong-arm

tactics on some of their allies to persuade them not to spread reprocessing technology around the world too lightheartedly.
Subsection (2) proposes the most extraordinary commercial arrangement that one could envisage. It says that if BNFL persuades a customer to put up money for a reprocessing plant, if something goes wrong, neither BNFL nor the customer but the British taxpayer would have to stump up. There is an open guarantee up to £500 million—and that is not a fleabite—that if anything goes wrong between the overseas customer and BNFL, the British taxpayer will be required to stump up.

Mr. Penhaligon: I pursued this point in some depth through Parliamentary Questions and I think the Minister will probably agree that if, for technical reasons, the plant fails, the overseas customer will lose his money. I received that information as a result of parliamentary Questions and I pass it on as a point of interest.

Mr. Hooley: It is up to the overseas customer if he is prepared to enter into a contract on that basis. If BNFL goes for such a contract and can persuade the overseas customer to accept it, the customer or BNFL should stand the loss.
I find it extraordinary that no provision appears in Clause 1 that BNFL must use its best possible technical expertise, that it must go into the commercial implications and possibly take special advice on the technology or the commercial viability of the contract. There is an open-ended offer of £500 million of taxpayers' money to enable BNFL to go ahead with a contract that is generally accepted to be technologically and politically of considerable uncertainty.
I certainly do not call into question the technical competence of BNFL scientists and engineers and their wish to do a good job, but this is an extremely hazardous and uncertain area. There was a disastrous accident at Windscale as recently as four years ago that resulted in the closing of part of the plant. Windscale has been struggling to recover from that for some time.
There was recently an unfortunate leak of radioactive liquid of some kind that


caused, perhaps unnecessarily, public anxiety about processing and the safety requirements at Windscale. We also know that, as a result of considerable pressure from the public and hon. Members, the Secretary of State for the Environment has called in a planning application for a particularly controversial aspect of work at Windscale. In the light of this I find it extraordinary that the House should be asked to commit the taxpayer to a potential outlay of £500 million—although I agree that the amount would not have to be anything like as large—for a reprocessing plant that has been the subject of so much controversy on technical, planning and international diplomatic grounds.
There is another consideration. The hon. Member for Truro said that the Japanese had not got far with their reprocessing. My impression is that they are not doing too badly. I was in Japan a fortnight ago and, according to the Press, the Japanese seem to be making some technical progress with the plant. This matter raises questions about the diplomatic relationship with regard to nuclear fuel between the United States and Japan. The United States may exert pressures on the Japanese Government not to go ahead with the reprocessing plant, even if the Japanese proved technically competent to build and operate it. But that is a matter for Japan and the United States.

Mr. T. H. H. Skeet: I dare say that the hon. Member for Sheffield, Heeley (Mr. Hooley) is aware that in The Guardian of 16th March it was indicated that the Japanese plant that will be ready and coming into operation shortly will be able to deal with 250 tonnes of oxide fuels a year. In that case the plant would not serve Japan's existing power stations and it is essential for the Japanese to try to obtain the English contract.

6.30 p.m.

Mr. Hooley: I am not disputing that. I think that I remember seeing that report. I am not certain what the Windscale capacity for the Japanese contract was supposed to be, but I think that it was about 600 tonnes a year, which is not widely different from the figure quoted by the hon. Gentleman.
I am not quibbling about the exact figures and I accept that, at least in the short term, Japan would find it convenient to have its fuel reprocessed at Windscale. However, we are not talking about the short term; we are talking about a major new project that is the subject of a planning inquiry by the British Government and about a technological process that has been called into question by a country as technologically sophisticated as the United States.
It is strange that we should be expected to give a blank cheque to BNFL and to tell the firm that, whatever it does, it cannot lose, that it can sign any contract with the Japanese, because if something goes wrong, for political, technical, or other reasons, the taxpayer will bail it out. There is no incentive for BNFL to examine carefully the commercial implications of the contract.
My reading of the clause and the Explanatory Memorandum does not indicate that BNFL will be under any constraints if advance payments have to be repaid. That is an odd way of dealing with public money.
We are constantly told that nuclear power is the cheapest form of power available. This calculation turns on whether a particular station is used for base loading and run continuously or brought in to meet peak load demand. One can never work out the cost of such things as research and development over the past two decades, the processing of fuel and the associated research and technology. I sometimes wonder whether we have been given an accurate assessment of the cost per unit of electricity generated from nuclear sources and when I see a Bill that asks for £1,000 million of taxpayers' money to continue the programme, I become more dubious about the real cost of nuclear power to this country.
It would be out of order to have a wide-ranging discussion on fuel and energy policy, though it has some bearing on the Bill. I have some reservations on the provision to give the Secretary of State authority, subject to parliamentary approval, to provide capital for the existing activities of BNFL, which I am not calling into question, but if we underwrite another £500 million for a contract


that has attracted within the United Kingdom and internationally so much uncertainly and criticism, that would be a curious act by this House at this time.

Mr. Palmer: The question that I put to the hon. Member for Truro (Mr. Penhaligon) goes to the root of the matter. We must make up our minds whether we want electricity derived from nuclear fission or not. If we are to get the massive blocks of power for the future to maintain our industry when fossil fuels eventually run out, I can see no way of obtaining them except by nuclear fission and power stations operating that principle. This has been the accepted wisdom in these matters for a considerable time.
The hon. Member for Truro said that the Liberal Party was not against nuclear power stations or against power stations generally—which was reassuring—and that in any economy with nuclear power stations, reprocessing facilities must be provided. That has been done in this country.
The Select Committee on Science and Technology considered reprocessing in considerable detail in 1968–69. We thought then that it would eventually be a fairly important trading and commercial business for this country, which was well ahead of most other nations in nuclear power.
One of our recommendations was that a separate State trading company should be set up to do this work. We looked upon it as legitimate commercial trading business. We needed this reprocessing ability for our own stations and, as sensible people, we thought that Britain, as a commercial and industrial nation, should take on this work. I am glad that the Government of the day implemented that recommendation.

Mr. Penhaligon: Can the hon. Gentleman explain why a reprocessing facility is needed now or at any time in the next decade when we seem to have got along quite well without it for the past 20 years?

Mr. Palmer: There is a constant movement of nuclear fuel between a power station and a reprocessing plant. The question of how much fuel is kept at a power station and how much is taken

for reprocessing at Windscale is a matter for arrangement, but a reprocessing facility is part and parcel of a nuclear power system. We cannot have a nuclear power station and then decide that there should not be any reprocessing.
I often think that many of the opponents of reprocessing are actually against nuclear power generally and it would certainly be more honest to say that we should not have nuclear power stations at all than to say that we can have the stations but we must not have the reprocessing.

Mr. Robin F. Cook: My hon. Friend has said that there is no nuclear power which does not have reprocessing as part of the industry, but the Canadian system, CANDU, was specifically designed to exclude the reprocessing of fuel. The Canadians do not reprocess oxide fuel. I visited Windscale with our hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) and was advised by scientists there that it is as possible to vitrify without reprocessing as with reprocessing. The only reason for reprocessing is the added economic benefit which it can bring, although this depends on having a fast breeder reactor to give it commercial viability. Without that, there is no need for commercial reprocessing.

Mr. Palmer: I am aware of the points made by my hon. Friend the Member for Edinburgh, Central (Mr Cook). I have seen the CANDU power station at Pickering. It is a highly successful plant. It is possible to arrange these matters so as not to have reprocessing, but that is not the nature of our nuclear power programme.

Mr. Jim Marshall: Does my hon. Friend agree that with our power stations reprocessing is required because we cannot allow nuclear waste to build up indefinitely? Does he also agree that one of the advantages—it may not be the main one in the long run—is that it decreases by nine-tenths the volume which ultimately has to be buried somewhere? Does he further agree that, if reprocessing is to be continued, the nuclear power industry is the only fuel-producing industry which is fully self-contained and has to bear all the costs, including reprocessing costs?

Mr. Palmer: My hon. Friend has underlined the point I am trying to make. I wish people would be honest and say that they are against nuclear power stations instead of trying to get at the nuclear power programme by attacking the financial arrangements for reprocessing. We have the reprocessing facilities. It is good, sensible, commercial business, subject to safeguards, to obtain such business internationally.
The hon. Member for Truro said that the United States had doubts about reprocessing. It may be that the United States does not have engineers as good as ours in this area. We must not necessarily assume that they can do everything. We must look at this matter from the point of view of our own stations. We have the reprocessing capacity and we can us it commercially. That was the sensible recommendation of the Select Committee in 1969.
I congratulate the BNFL on the great success that it has made of the task that was given to it. It is a successful State trading company.
With large capital transactions of this kind, there must be a Government guarantee. There must be sufficient financial arrangements. If we leave out the subsection, the Bill will be wrecked. I think that that is the real intention behind the amendment. However, I wish that the hon. Member for Truro would do it in a more straightforward way.

The Under-Secretary of State for Energy (Mr. Alex Eadie): A number of general points have been made with which I should like to deal before turning to other aspects of the debate. I think that the most useful course is for me to deal with the substance of Amendment No. 1.
As I indicated during earlier debates on the Bill, the Government's intention in taking these powers is to enable them to guarantee advance payments made by overseas customers to finance their share of the proposed oxide reprocessing plant at Windscale, which, as the House knows, is to be the subject of a public inquiry. In view of the sums involved—the limits proposed in the Bill relate to the estimated cost of the plant—the Government believe that it is reasonable that customers should be guaranteed a return of these payments should BNFL be unable to repay in the limited circumstances which

have already been explained in great detail.
6.45 p.m.
In addition, we cannot rule out the possibility that other aspects of BNFL's business, such as uranium enrichment or hexafluoride conversion, might be financed in a similar way. If the terms were right, we would not wish BNFL to be denied access to financing its investment in this manner because the Government could not guarantee such advance payments. In principle, therefore, the amendment is unacceptable. If the indirect object of the amendment, as the hon. Member for Truro (Mr. Penhaligon) has explained, is to discourage and, if possible, prevent BNFL from undertaking overseas reprocessing work, that is a mistaken objective.
There are two important advantages in undertaking this kind of work. Not only is it attractive commercially, but it assists our non-proliferation objectives. By taking on work of this kind for foreign countries, we help to discourage the development of reprocessing plants overseas.

Mr. Hooley: Am I right in thinking that Sir John Hill is on record as saying that there is no commercial viability in reprocessing and that the cost is far greater than the value of the material recovered?

Mr. Eadie: My hon. Friend is wrong in thinking that. We discussed these matters at great length in Committee and to some extent on Second Reading.

Mr. Penhaligon: The hon. Member for Sutton and Cheam (Mr. Macfarlane), who is not present, made a long and careful speech outlining why it was not as profitable as the Minister thought. The hon. Gentleman's reply was that the hon. Member for Sutton and Cheam had his experts and he had his own. That was the end of the Government's reply.

Mr. Eadie: I think that the hon. Gentleman has been very unfair to the hon. Member for Sutton and Cheam (Mr. Macfarlane). I think that the hon. Member for Ross and Cromarty (Mr. Gray) will recall that his hon. Friend the Member for Sutton and Cheam spoke at great length on the non-proliferation argument and that I responded to that argument. The hon. Member for Truro may not agree on how the hon. Member for Sutton


and Cheam put the argument. It is for both of them to argue that matter. I suggest that it was in the context of the non-proliferation argument, and I complimented the hon. Gentleman on it.

Mr. Hamish Gray: For the sake of the record, perhaps I should point out that the hon. Member to whom reference has been made is my hon. Friend the Member for Carshalton (Mr. Forman), not my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane).

Mr. Penhaligon: I am sorry. I thought that it was the hon. Member for Sutton and Cheam.

Mr. Eadie: Yes, it is the hon. Member for Carshalton (Mr. Forman).
The main arguments advanced against undertaking the process are that it might not be safe, that we might find ourselves having to store the resulting nuclear waste, and that there might be heavy losses if advance payments had to be returned because of technological or other difficulties in operating the plant.
As to the first argument, as my right hon. Friend the Secretary of State for the Environment said on 22nd December, the relevant safety considerations will be examined at the forthcoming public inquiry. As to the second argument, contracts are to contain clauses giving the option to return waste to the country of origin and to discontinue the reprocessing obligation if this cannot be done. As to the third argument, I repeat the assurances already given that the technological risk in these contracts will be borne by the customer, not by the company, and that advance payments will be repayable only in circumstances which would not represent a loss to the company. I hope that the House will reject Amendment No. 1.
On Amendment No. 4, I think that the hon. Member for Truro to some extent tied his arguments to those in support of Amendment No. 1, so I would advocate the same arguments as I used on Amendment No. 1.
I come now to the point of substance that the hon. Member for Truro raised. He was concerned about undertaking the storage of irradiated fuel and taking in such fuel before knowing how residual waste will be disposed of. I refer him to

the remarks made on Second Reading by my right hon. Friend the Secretary of State. I shall not quote my right hon. Friend's words, but the hon. Member for Truro can refer if he wishes to Hansard of 8th February, at col. 1256. when this matter was dealt with at great length.
The hon. Member for Truro also argued about America, but I ask him to recollect that I dealt with the issues of proliferation and safeguards at great length in Committee, as he will see if he looks at columns 75 and 76 of Hansard. On the question of American intervention, the hon. Member asked about the implications for the Japanese contract of any United States restraint or other international restraints on the shipment of irradiated fuel. My right hon. Friend the Secretary of State for Energy explained the implications in a Written Answer on 23rd December, when he stated:
It is usual for nuclear fuel to be supplied subject to a requirement that it will not be transferred by the recipient to another country without the suppliers' authorisation. This is the only international restraint on the transfer of spent fuel from Japan to the United Kingdom for reprocessing. This requirement is not new, and authorisation has never been refused for transfer to the United Kingdom."—[Official Report, 23rd December 1976; Vol. 923, c. 299.]
The Government of the United States are currently reviewing the conditions under which authorisations for transfers were granted, in the light of the conclusion of the review of nuclear export policy. If the United States stopped BNFL reprocessing, the risk would fall on the customer. Repayments would be due in under the limited circumstances that I have described at length.

Mr. Skeet: I understand that the Minister is referring to existing contracts. The American Government have authorised transfer to the United Kingdom for reprocessing. Will the hon. Gentleman take a step further and explain what will happen to the new contract which is likely to come into operation? Would the United States exercise a veto in that case? If it did, there would be great problems for the United Kingdom.

Mr. Eadie: The hon. Member for Bedford (Mr. Skeet) posed the same question in Committee.

Mr. Skeet: I did not receive an answer.

Mr. Eadie: I said in Committee that one reason why I could not give an answer was that I was not privy to the decisions of the American Government. I am still not privy to the decisions of the American Government.

Mr. Skeet: The hon. Gentleman should ask.

Mr. Eadie: The hon. Gentleman is putting a question to me as if I knew what the decisions of the American Government were. I have replied as best I can to the debate, and I hope that the House will reject the amendment.

Mr. Gray: It is not the intention of the official Opposition to vote on this amendment, although the hon. Member for Truro (Mr. Penhaligon) says that he will vote on it.

Mr. Penhaligon: We will.

Mr. Gray: To some extent the amendment of the hon. Member for Truro was irrelevant at this stage of the proceedings. Those of us who were on the Committee heard him deal with this subject at great length, and he was given the same answers as he has received today. I think that the hon. Member for Truro has a genuine desire to see more parliamentary scrutiny. That could well be achieved if he interested himself in the next Opposition amendment.
The Liberal Party has to make up its mind about its attitude to the whole nuclear industry. In the part of the United Kingdom that I represent, the North of Scotland, there is a United Kingdom Atomic Energy Authority establishment at Dounreay. In the years that I have been in politics I do not recall any Liberal candidate or any representative of the Liberal Party taking exception to that establishment at any time. The former Liberal Member for Caithness and Sutherland, who is now Lord Mackie, would be willing to confirm that the Liberals in that part of the country did not take exception to Dounreay when it was created, and, to my knowledge, they have not taken exception to it since.

Waste fuel has been moved from that part of the country to Windscale for many years. This has been known, and no objection has been taken to it. It seems rather strange that at this stage a great deal of anxiety should be expressed about it. I do not say that the anxiety is not justified, and I wholly support every conceivable measure which would ensure the safety of transport of any spent fuel, but it seems surprising that such concern should be expressed at this stage.

Mr. Penhaligon: The reason is fairly obvious. We are about to build a reprocessing plant. If I judge the feeling of the House correctly, the House is about to vote a very large sum of money to build a plant for which the House has also agreed that there should be a public inquiry. The House will be voting the money before that public inquiry has reported. That seems to be lunacy of the first order, even if all the hon. Gentleman's other points are valid.

Mr. Gray: The whole point—which the hon. Member for Truro had not spotted—is that the House will be voting on an extension of the limits. The fact that a public inquiry is to take place is a complete safeguard and should answer the hon. Gentleman's point.
It is not unusual for a Government to come to the House and ask for limits to be extended. If the Government continue in office for much longer—let us hope that they do not, but it is up to the Liberals what they do about that—it is likely that they will come back to the House with a great many more Bills to ask for limits to be increased because of the inflation to which they have contributed. But it is not my duty tonight or any other night to argue the Government's case.
We do not see that the amendment does anything more than the amendment that the hon. Member for Truro discussed in Committee, and we shall not be supporting him on this occasion.

Question put, That the amendment be made:—

The House divided: Ayes 28, Noes 171.

Division No. 90.]
AYES
[6.59 p.m.


Bottomley, Peter
Fookes, Miss Janet
Grylls, Michael


Clark, Alan (Plymouth, Sutton)
Glyn, Dr Alan
Henderson, Douglas


Cooke, Robert (Bristol W)
Gow, Ian (Eastbourne)
Hodgson, Robin


Fisher, Sir Nigel
Grimond, Rt Hon J.
Howells, Geraint (Cardigan)




Knight, Mrs Jill
Rathbone, Tim
Wainwright, Richard (Colne V)


Lawrence, Ivan
Rees-Davies, W. R.
Wakeham, John


Marshall, Michael (Arundel)
Stainton, Keith



Mates, Michael
Stanbrook, Ivor
TELLERS FOR THE AYES:


Miscampbell, Norman
Thompson, George
Mr. David Penhaligon and


Nelson, Anthony
Thorpe, Rt Hon Jeremy (N Devon)
Mr. A. J. Beith.


Onslow, Cranley
Trotter, Neville





NOES


Allaun, Frank
Grant, John (Islington C)
Parker, John


Armstrong, Ernest
Grocott, Bruce
Parry, Robert


Ashley, Jack
Harper, Joseph
Phipps, Dr Colin


Ashton, Joe
Harrison, Walter (Wakefield)
Radice, Giles


Atkinson, Norman
Hattersley, Rt Hon Roy
Richardson, Miss Jo


Bagier, Gordon A. T.
Hoyle, Doug (Nelson)
Roberts, Gwilym (Cannock)


Barnett, Rt Hon Joel (Heywood)
Huckfield, Les
Roderick, Caerwyn


Bates, Alf
Hughes, Rt Hon C. (Anglesey)
Rodgers, George (Chorley)


Benn, Rt Hon Anthony Wedgwood
Hughes, Robert (Aberdeen N)
Rodgers, Rt Hon William (Stockton)


Bennett, Andrew (Stockport N)
Hughes, Roy (Newport)
Rooker, J. W.


Bishop, E. S.
Hunter, Adam
Rose, Paul B.


Blenkinsop, Arthur
Irvine, Rt Hon Sir A. (Edge Hill)
Ross, Rt Hon W. (Kilmarnock)


Boardman, H.
Jackson, Colin (Brighouse)
Ryman, John


Bray, Dr Jeremy
Jackson, Miss Margaret (Lincoln)
Sandelson, Neville


Brown, Ronald (Hackney S)
Janner, Greville
Sedgemore, Brian


Buchan, Norman
Jeger, Mrs Lena
Selby, Harry


Buchanan, Richard
Johnson, James (Hull West)
Shaw, Arnold (Ilford South)


Butler, Mrs Joyce (Wood Green)
Jones, Alec (Rhondda)
Silkin, Rt Hon S. C. (Dulwich)


Callaghan, Jim (Middleton &amp; P)
Jones, Dan (Burnley)
Silverman, Julius


Canavan, Dennis
Kaufman, Gerald
Skinner, Dennis


Carter, Ray
Kerr, Russell
Small, William


Carter-Jones, Lewis
Kinnock, Neil
Smith, John (N Lanarkshire)


Clemitson, Ivor
Lambie, David
Spearing, Nigel


Cocks, Rt Hon Michael
Lamborn, Harry
Spriggs, Leslie


Cohen, Stanley
Lamond, James
Stallard, A. W.


Coleman, Donald
Latham, Arthur (Paddington)
Stewart, Rt Hon M. (Fulham)


Cowans, Harry
Leadbitter, Ted
Stoddart, David


Cox, Thomas (Tooting)
Lee, John
Stott, Roger


Crawshaw, Richard
Lester, Miss Joan (Eton &amp; Slough)
Summerskill, Hon Dr Shirley


Crowther, Stan (Rotherham)
Lewis, Ron (Carlisle)
Taylor, Mrs Ann (Bolton W)


Cryer, Bob
Lipton, Marcus
Thomas, Ron (Bristol NW)


Davidson, Arthur
Loyden, Eddie
Thorne, Stan (Preston South)


Deakins, Eric
Lyon, Alexander (York)
Tierney, Sydney


Dean, Joseph (Leeds West)
Lyons, Edward (Bradford W)
Tinn, James


Dempsey, James
McCartney, Hugh
Tuck, Raphael


Doig, Peter
McDonald, Dr Oonagh
Varley, Rt Hon Eric G.


Dormand, J. D.
McElhone, Frank
Wainwright, Edwin (Dearne V)


Duffy, A. E. P.
Maclennan, Robert
Walden, Brian (B'ham, L'dyw'd)


Dunnett, Jack
McMillan, Tom (Glasgow C)
Walker, Harold (Doncaster)


Eadie, Alex
Madden, Max
Walker, Terry (Kingswood)


Edge, Geoff
Magee, Bryan
Ward, Michael


Ellis, John (Brigg &amp; Scun)
Mahon, Simon
Watkins, David


Ennis, David
Marks, Kenneth
Watkinson, John


Evans, Ioan (Aberdare)
Marshall, Dr Edmund (Goole)
Weetch, Ken


Ewing, Harry (Stirling)
Marshall, Jim (Leicester S)
White, Frank R. (Bury)


Faulds, Andrew
Maynard, Miss Joan
Whitlock, William


Fernyhough, Rt Hon E.
Mendelson, John
Williams, Rt Hon Alan (Swansea W)


Flannery, Martin
Molloy, William
Williams, Sir Thomas (Warrington)


Fletcher, Ted (Darlington)
Moonman, Eric
Wilson, Alexander (Hamilton)


Foot, Rt Hon Michael
Morris, Charles R. (Openshaw)
Wilson, Rt Hon Sir Harold (Huyton)


Forrester, John
Moyle, Roland
Wise, Mrs Audrey


Fowler, Gerald (The Wrekin)
Oakes, Gordon
Woodall, Alec


Freeson, Reginald
Ogden, Eric
Woof, Robert


Garrett, W. E. (Wallsend)
Orbach, Maurice
Wrigglesworth, Ian


George, Bruce
Orme, Rt Hon Stanley



Golding, John
Ovenden, John
TELLERS FOR THE NOES:


Gould, Bryan
Palmer, Arthur
Mr. James Hamilton and


Gourlay, Harry
Park, George
Mr. Peter Snape.


Graham, Ted

Question accordingly negatived.

Mr. Geoffrey Dodsworth: I beg to move Amendment No. 6, in page 1, line 20, leave out from "section" to end of line 24 and insert:
And before any guarantee is given, an order made by statutory instrument showing the extent, character of and amount of the guarantee shall be laid before and approved by the House of Commons".

Mr. Deputy Speaker: With this we may take Amendment No. 7, in page 1, line 20, leave out from "section" to end of line 24 and insert:
and any of the following matters shall be subject to an order made by statutory instrument, a draft of which has been laid before and approved by the House of Commons:

(a) guarantees concerning services relating to the location and storage of radioactive materials;


(b) guarantees concerning services relating to the importance of waste materials.".

Mr. Dodsworth: It is necessary to outline first the purpose of subsection (3) of Clause 1, which provides that a statement of the expenditure and character of guarantees, which were the source of discussion on the previous amendment, should be laid before the House. It is the purpose of the amendment to provide the House with more accurate and definitive control over the actions taking place, and perhaps putting in more precise form the responsibilities of the House.
We had the opportunity in Standing Committee to discuss the problems which arise in the form of democratic and parliamentary control in relation to matters of this particularly complicated and difficult nature. We had already recognised that this was a matter which had very strong—and, indeed, on some occasions overriding—environmental considerations. The social considerations, which might affect future generations, place a very special obligation on the House of Commons in particular. It is really that matter of parliamentary control which has caused me to put this amendment before the House.
Subsection (3) states that:
a statement showing the extent and character of the guarantee, and the circumstances in which it came to be given",
shall be placed before the House. The object of my amendment is to seek approval before that event and not after it. I recognise that that is changing the emphasis and putting the decision-making process outside ministerial action but inside this House of Commons, in the Chamber itself.
We must look at some of the current evidence of what has happened on reprocessing contracts so far. Our current experience shows that, on work that has taken place up to now, losses have not yet been fully determined. The source of that information lies in the last accounts of British Nuclear Fuels Limited.
Members of the Standing Committee will be familiar with some of these matters, and I may be forgiven if I reiterate a little about them. On page 17 of the fifth annual report and accounts of British Nuclear Fuels Limited, note

1(b), referring to the trading profits, says that
Certain reprocessing contracts entered into in previous years which have now become unprofitable are in course of renegotiation. Pending the outcome of these negotiations it is not possible to determine whether any provision needs to be made for losses which may arise in future years.
Those are quite ominous words.
On page 11 those doubts are re-emphasised. The auditors underline their concern and consideration. It is a very reputable firm of auditors, Coopers and Lybrand. The report, which is signed by the auditors, says in note 3:
For the reasons given in note 1(b) no provision has been made in these accounts in respect of any future losses which might arise on certain reprocessing contracts which are in the course of renegotiation.
That seems to me to be a matter which should be drawn to the attention of all of us so that we may see what is happening in this case.
Indeed, that was my concern when I put questions to the Minister asking what were the underlying facts behind those statements of doubt and inability to decide the amount of losses arising on reprocessing. I was told that these were matters of the day-to-day running of British Nuclear Fuels Limited, and I was asked to write to that authority. I did so.
7.15 p.m.
Here we see illustrated the problems of parliamentary control to which my amendment refers, because in his reply, the Chairman of British Nuclear Fuels Limited said:
As you will see from the letter, Government decisions do in fact impinge on two of your questions, but I will nevertheless do what I can to answer them.
Therefore, although we are told in parliamentary terms that this is a matter of day-to-day running of this quasi-nationalised institution, we find that the chairman is saying that this is a matter on which Government decisions impinge. It is for that reason that I am concerned that matters of this nature should come before the House.
If we go further into the explanation of the reprocessing losses which have been taking place up to now, we find in that very letter that the Chairman of British Nuclear Fuels Limited said that he could not in the present uncertain situation


give an estimate of future losses. He added:
We had hoped to renegotiate arrangements which would minimise or eliminate loss, but the announced intention to hold a public inquiry into the new plant for reprocessing oxide fuel, coming as it does a year after the Government's approval for further overseas reprocessing business, could make a substantial loss unavoidable.
We see there a political and public action which is entirely proper, and which starts to bedevil some of the commercial aspects of the company. We have a parliamentary duty to involve ourselves in those detailed matters.
On page 12 of the annual report and accounts there are references to long-term storage problems. This once again illustrates the difficulties that we have in maintaining the proper sort of control, because note 4 on page 12, dealing with accounting policies, says that
An amount is set aside each year for the estimated cost of the long-term storage of the Group's waste products. The total amount retained is reviewed annually based on the latest technical assessment but this is a long-term project and the computation of the estimated costs is necessarily imprecise.
I agree with that absolutely. It is the imprecision, the uncertainty and the fact that we are looking into the future which make me feel that we have to be very careful in our review and our method of control of this matter.
We know, for example, from the recent history that there have been some very uncertain problems on the question of pay. In that same annual report and accounts the chairman's review mentions the special pay problems and the difficulties reflected in them. Recently the Secretary of State paid literally a flying visit to try to take some emergency action. In those circumstances, it seems clear to me that political considerations are dominant and that Parliament has a duty to satisfy itself on the policies as to the usage of the funds and not only on the question of appropriation.
The Under-Secretary of State was very kind to all members of the Standing Committee and wrote to us explaining some of the difficulties which he felt arose in the consideration of an amendment of this nature. With his approval, I shall refer to some of the matters contained in that letter. I felt that the Minister's approach was both helpful and thoughtful, seeking

to ascertain whether we could find a method of control over this activity.
The Under-Secretary of State's first point was that this was probably an unnecessary duplication of some of the financial controls which already exist under the terms of the Bill. That may be so, but I have tried to indicate that there is a special situation here. The Under-Secretary added that
it would be illogical to have more stringent controls over the giving of guarantees than over the provision of finance direct.
I do not wish to dilate at length on the fact that a guarantee is as good as the money. It is an obligation of this House and of Parliament to ensure that guarantees are not freely or thoughtlessly given, or given in an uncontrolled fashion. A guarantee is the word of the Government and its bond, and we have just as much a duty to safeguard the issuing of those guarantees as we have a duty to safeguard the issuing of funds.
After all, in the very form of the Bill we must recognise the special nature and circumstances. The Bill says that a statement showing the extent and character of the guarantees, and the circumstances in which they came to be given, shall be laid before the House. That is too late a stage, and it is not enough. We need an opportunity for the House to put a point of view before the ministerial decision is taken.

Mr. Skeet: Is not my hon. Friend's best argument the fact that this is precisely what the Government are doing with the Japanese contract? We know the extent of the guarantee of the contract for a thermal-oxide plant to be built for operation in the early 1980s. We know that the guarantee covers specific commitments to be negotiated with the Japanese utilities. My hon. Friend is asking for prior notification and examination by the House and in doing so he is following precisely what is being done in the Japanese negotiations.

Mr. Dodsworth: I am obliged to my hon. Friend. In Committee the Under-Secretary of State referred to the fact that we had an affirmative procedure at an earlier stage in order to provide just such opportunity for debate as I am now seeking. I must make it clear that I am not anti-nuclear energy. I am, however, concerned that we should discharge our obligation to the public in the course of


setting up the future of our nuclear industry, and I am seeking to do so in a positive and constructive way.
I was concerned about a statement in the Minister's letter —which was offered in a helpful and friendly spirit—when he referred to the question of guarantees of advance payments. He said that the difficulty was that a guarantee might not be available "even if the Secretary of State had expressed his support for the venture and his willingness to give a guarantee". I do not think that the Secretary of State should be allowed to give a guarantee until we have had discussions on it. That is the object of this exercise. The amendment would clearly lay down that we should have to have an order made by Statutory Instrument showing the extent and amount of the guarantee. That Statutory Instrument would have to be laid before and approved by the House.
I understand and accept the line taken by the Minister in his letter, when he said:
It would complicate and delay the process of giving a guarantee and (if taken as a precedent and adopted more widely) would be likely to put a severe burden on Parliamentary time.
But I have exactly that object in view. It is my understanding and belief that Parliament has lost its financial teeth, and it is time it got them back again. It is time that we got a grip on the financial affairs of the nation. I am offering the House the opportunity, through this amendment, of taking that grip in this matter.

Mr. Gray: My hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth) moved the amendment skilfully, as he did a similar one in Committee. This is not an official Opposition Front Bench amendment, but we are sympathetic towards it.
I was disappointed in the letter which the Under-Secretary of State sent to all hon. Members who served on the Standing Committee. We had considerable discussion of this matter one morning in Committee, and to the Opposition it appeared that the Government Benches were rather thinly populated. In his reply to that debate the Minister began by not being particularly helpful to my hon. Friend, but his attitude changed considerably when his Whip whispered in his

ear. By the time he was finishing his reply, the hon. Gentleman was indicating to my hon. Friend that, although he could give no promise, he would look at my hon. Friend's proposal sympathetically.
Earlier in the debate the Minister said:
if individual approvals were to be required, there would seem to be no point in having an overall limit.
Later, however, he said:
I am prepared, because this is a vital principle, to take the matter back and examine it and to come forward with views on it. I say that without any promise, but I give the hon. Gentleman a guarantee—since we are talking about guarantees—that I shall examine his proposition in great detail."—[Official Report, Standing Committee A, 3rd March 1977; c. 103.]
I was, therefore, disappointed by the hon. Gentleman's letter to my hon. Friend advising him that, although the Minister and his advisers had considered the matter,
The normal practice in controlling guarantee powers is that followed in the Bill as now drafted.… This practice has been followed by successive Governments…".
That really is not a very good answer. We all know that in this House Ministers rest on the actions of previous Governments, and anything that is a precedent is used over and over again.
My hon. Friend has tonight made a very good case for further parliamentary scrutiny. When we are talking of reprocessing plants we are talking of a very new activity, and it is difficult to be certain just what the cost involved may be. There is also difficulty in determining exactly what is the ministerial responsibility and what is the day-to-day responsibility of British Nuclear Fuels. All that my hon. Friend is trying to do is ensure that Parliament has complete scrutiny over the sums of money involved. He himself explained that he is not antinuclear. I feel the same way. With the limited knowledge which a layman can have, and from the information given to one, one can only reiterate that British Nuclear Fuels has a very proud record of safety. That, however, is no excuse for not monitoring with the greatest skill the amounts of money voted by this House.
We shall listen carefully to what the Minister has to say before we decide whether to support my hon. Friend in


the Lobby, just as he himself will have to decide whether he wishes to press his amendment to a Division. It would be wrong for us to decide before we hear what the Minister has to say. I hope that he has been more persuaded by our remarks than he was in Committee and that, despite what he said in his letter, he will decide to overrule his previous view. My hon. Friend has given him a case that he can usefully consider.

Mr. George Thompson: I did not have the privilege, or perhaps the burden, of serving on the Standing Committee, so I have heard only this debate on the subject. The hon. Member for Hertfordshire, South-West (Mr. Dodsworth) has made a very good case. Guarantees of the magnitude we are talking about ought to be subject to the positive control of the House.
The amendments also concern the disposal of wastes. The Minister knows of my deep interest, both personal and as a constituency Member, in this matter. I believe that firm control of these guarantees by the House would be a guarantee to the people, who are worried about the disposal of these wastes, that control would rest with this House at the financial as well as at other levels. The public are concerned about these matters and, quite properly, rely on the House to subject them to close scrutiny on their behalf. From what the hon. Member has said, I am in favour of his proposition as being a solution to the problem.

7.30 p.m.

Mr. Eadie: I am in great difficulty. I do not quarrel in any way with the hon. Member for Hertfordshire, South-West (Mr. Dodsworth). Indeed, I have great admiration for his advocacy. He was a powerful advocate in Committee and he is a powerful advocate here today. I should have to do well in order to emulate him. But I cannot win, because I wrote not only to the hon. Gentleman but to all members of the Committee to acquaint them with the facts. It was not a question of my naturally wanting to be hostile, because that is not my make-up. People sometimes have common points of view, and I believe in argument, discussion and debate to try to resolve the issues.
I told the Committee and the hon. Gentleman, which I think I was entitled to do because of the hon. Gentleman's advocacy for his amendment, that I would give it close consideration. I have done that, and I regret to inform the House that I have concluded that the Government cannot accept the amendment. I owe it to the House to try to explain why. I regret that I shall have to go over some of the grounds and some of the arguments that were used in Committee, but I think that it is appropriate to place my comments on record.
The amendment is unacceptable in principle. The practice in controlling guarantee powers is that followed in the Bill—to set up an overall limit, to require Treasury consent to individual guarantees and to require returns to Parliament to show how that power has been used. I hope that the hon. Member for Galloway (Mr. Thompson) is listening. I saw him smiling when he was pressing the case concerning the power of Parliament. He is doing his best to get out of this Parliament. I know why he was smiling. I say that as an aside, but I know he is suggesting that he wants accountability to Parliament. I hope that the hon. Gentleman is listening to this. He was entitled to raise the matter, and I am sorry that he could not be with us on the Committee.
This practice has been followed in the past. The hon. Member for Ross and Cromarty (Mr. Gray) mentioned it when I said that it had been "followed by successive Governments". He made the point that when the present Opposition were the Government they laid down a similar procedure in the Gas Act 1972. To go further and require parliamentary approval for each exercise of the guarantee would unnecessarily complicate and delay that process.
The hon. Member for Hertfordshire, South-West understands this probably better than anyone else present in the House. If it were taken as a precedent, it would be likely to put a severe burden on parliamentary time. It would also be illogical in the context of guarantees for loans to BNFL and TRCL. The arrangements under the 1971 Act and the Bill would allow the companies' financial requirements to be met in two ways, either by loans from the private sector,


which the Secretary of State might guarantee, or directly from public funds by share purchase or through the National Loans Fund. These two latter methods of financing are not subject to a control of the kind proposed, and it would be illogical to have more stringent control over guarantees than over the provision of finance direct.
The amendment's application to guarantees for advance payments could prejudice BNFL's commercial interests. If the company wanted to negotiate business in an area where guaranteed advance payments were needed, it would be unable to have any assurance that such a guarantee would be available if negotiations were otherwise successful and it the Secretary of State agreed that a guarantee would be given. This would inevitably lessen the interest of a company and customer in embarking upon the complex negotiations involved.

Mr. Skeet: Guarantees arise under Clause 1(1) and Clause 1(2) and, as the Minister said, there may be an extremely broad coverage of guarantees under Clause 1(2). My hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth) is arguing that there should be prior approval by Parliament, and the Minister is saying that the commercial relations of BNFL will be prejudiced, as in the case of the Japanese contract. How has BNFL been prejudiced in any way? Other factors have supervened. It is not a question of guarantees. If this procedure had been followed with prior notification, that would have been satisfactory for the company.

Mr. Eadie: The hon. Gentleman is trying to assume that he is making a clever point, but there is the question of commercial aspects in negotiations. By drawing in the Japanese contract as an argument in favour of the amendment, the hon. Gentleman is doing his hon. Friend a great disservice. His hon. Friend's advocacy was not related to whether they were Japanese contracts or anything else. The point of his argument was that there should be Parliamentary accountability. The hon. Member for Bedford (Mr. Skeet) has done his hon. Friend a great disservice by his intervention.
The amendment would unnecessarily complicate the giving of guarantees. It

would make for an illogical situation with regard to the provision of finance for the two companies, and it might prejudice BNFL's commercial interest. For those reasons the Government cannot accept the amendment, and I hope that the hon. Gentleman will withdraw it.
The main objection to Amendment No. 7 is one of principle. The practice in controlling guarantee powers, which has been followed by Administrations from both parties, is that followed in the Bill —that is, to set an overall limit, to require Treasury consent to each exercise of the power, and to require returns to Parliament. To go further and require specific approval for the exercise of the power, whether in every case or for a class of cases, would complicate and delay the process of guarantees. This could prejudice the company's commercial interests. Uncertainty whether a guarantee would be available would, to say the least, discourage both company and customer in the complex negotiations involved in setting up the kind of contract that would involve guarantees.
The amendment would have unwelcome side effects. Although I think that the hon. Gentleman has reprocessing contracts mainly in mind, the amendment as drafted would restrict guarantees arising in connection with the general financing of BNFL and TRCL under Clause 1(1). That financing would relate to the general external finance requirement arising from the companies' total activities. Such activities could well include some of the items mentioned, in which case an order would be required. That would not only complicate the financing arrangements but would be illogical. Guarantees are an alternative to direct financing by the Government, and the latter method is not subject to any restriction of this kind.
Finally, because of the deletion of the existing words in the subsection, guarantees which did not involve services of the kind mentioned would not need to be reported to the House at all. I hope that the House will reject the amendment.

Mr. Dodsworth: In view of what the Minister has said, I should be happy to withdraw Amendment No. 7. I must, however, express my extreme disappointment over the whole of the rest of the content of his observations on Amendment No. 6. I do not feel that he has


in any way answered the purport of the case put forward for Amendment No. 7.

Mr. Deputy Speaker: Order. I must point out to the hon. Gentleman that technically it is only Amendment No. 6 which is before the House.

Mr. Dodsworth: I understand, Mr. Deputy Speaker, and I apologise to you for my inept phrasing. I accept the burden of the Minister's observations on Amendment No. 7. On Amendment No. 6, however, the point of view expressed by the Minister is unacceptable. It is not a fair observation to make on a narrowly-drawn affirmative procedure, which is what this is. It is a sharply-defined procedure—I use the Minister's words. It is the specific nature of the industry that is of consequence. In those circumstances, it does not seem that we have any reason to withdraw the amendment.

Mr. Eadie: I am sorry that I gave way to the hon. Gentleman. I felt that he had made two important points, and I wanted to attempt to reply to them. Whether I should have satisfied him with my reply is not for me to say, but I regret his remarks, although I understand how he feels.
The hon. Gentleman talked about existing unprofitable contracts. I have to inform him that the existing contracts contained provision for escalation costs which were not in the event sufficient. That difficulty will not arise in the contracts that we now envisage. The new contracts will be on a full cost-plus, risk-free basis—I mentioned this in Committee—that will ensure that the company maintains a good return.
The hon. Gentleman then raised the question of the opportunity to discuss BNFL's finances, and he made some play of this. He suggested that there was insufficient opportunity to discuss BNFL's investment and expenditure. I remind him that the whole range of BNFL's activities was discussed in a useful debate, which a number of those who were on the Standing Committee will recall, on 28th

July 1976. The debate was on an affirmative proposal to increase the limit of payment to BNFL under the Atomic Authority Act 1971. The Bill now before the House provides a further opportunity for debate as and when increases are made in future under the new limit. The company's accounts are available to the House every year and the Opposition can, if they so desire, find time to discuss them. That is their prerogative, and no Opposition should be deprived of that right.

I hope the House will accept that I have given the best possible explanations on the points that have been raised, and that it will oppose the amendment if the hon. Gentleman does not withdraw it.

Mr. Dodsworth: I regret that I do not find the Minister's explanations satisfactory. I do not feel that it is right to talk about the burden of additional parliamentary work and additional legislation when we are dealing with one specific, narrowly-defined matter that is of particularly onerous concern for the future, both environmentally and socially. I do not think that the case has been answered by the Minister.
It might have been helpful if subsection (3) had reflected the Department's and the Minister's acknowledgement of the seriousness of this issue, but it says that a statement has to be laid before the House after the event. My suggestion is that that should be done before the event.
Future contracts might well be on a cost-plus basis, but my experience of contracts of this nature is sufficient for me to ask that the terms be defined first. I need to know those and what the cost will be before I can decide whether there will be effective control from the point of view of the House. I hope that my hon. Friends will support me in pressing the amendment to a Division.

Question put, That the amendment be made:—

The House divided: Ayes 40, Noes 145.

Division No. 91.]
AYES
[7.45 p.m.


Bain, Mrs Margaret
Clarke, Kenneth (Rushcliffe)
Gardner, Edward (S. Fylde)


Beith, A. J.
Cockcroft, John
Grimond, Rt Hon J.


Boscawen, Hon Robert
Fairgrieve, Russell
Hampson, Dr Keith


Bottomley, Peter
Fisher, Sir Nigel
Hicks, Robert


Buck, Antony
Fookes, Miss Janet
Hodgson, Robin


Budgen, Nick
Fox, Marcus
Howells, Geraint (Cardigan)




Knight, Mrs Jill
Penhaligon, David
Thompson, George


Lawrence, Ivan
Rathbone, Tim
Trotter, Neville


Macfarlane, Neil
Ross, Stephen (Isle of Wight)
Viggers, Peter


Morris, Michael (Northampton S)
Sainsbury, Tim
Wainwright, Richard (Colne V)


Nelson, Anthony
Shersby, Michael



Newton, Tony
Skeet, T. H. H.
TELLERS FOR THE AYES:


Nott, John
Smith Cyril (Rochdale)
Mr Geoffrey Dodsworth and


Page, Rt Hon R. Graham (Crosby)
Stanbrook, Ivor
Dr Alan Glyn.


Pardoe, John
Steel, Rt Hon David





NOES


Allaun, Frank
Golding, John
Richardson, Miss Jo


Armstrong, Ernest
Grocott, Bruce
Roberts, Gwilym (Cannock)


Ashton, Joe
Harrison, Walter (Wakefield)
Roderick, Caerwyn


Atkinson, Norman
Hoyle, Doug (Nelson)
Rodgers, George (Chorley)


Bagier, Gordon A. T.
Huckfield, Les
Rodgers, Rt Hon William (Stockton)


Barnett, Rt Hon Joel (Heywood)
Hughes, Rt Hon C. (Anglesey)
Rooker, J. W.


Bates, Alf
Hughes, Roy (Newport)
Rose, Paul B.


Benn, Rt Hon Anthony Wedgwood
Hunter, Adam
Ross, Rt Hon W. (Kilmarnock)


Bennett, Andrew (Stockport N)
Irvine, Rt Hon Sir A. (Edge Hill)
Ryman, John


Bishop, E. S.
Jackson, Miss Margaret (Lincoln)
Sandelson, Neville


Blenkinsop, Arthur
Janner, Grevllie
Sedgemore, Brian


Boardman, H.
Johnson, James (Hull West)
Selby, Harry


Bray, Dr Jeremy
Jones, Alec (Rhondda)
Shaw, Arnold (Ilford South)


Buchanan, Richard
Kerr, Russell
Silverman, Julius


Butler, Mrs Joyce (Wood Green)
Kinnock, Neil
Skinner, Dennis


Callaghan, Jim (Middleton &amp; P)
Lamond, James
Small, William


Canavan, Dennis
Latham, Arthur (Paddington)
Smith, John (N Lanarkshire)


Clemitson, Ivor
Leadbitter, Ted
Snape, Peter


Cocks, Rt Hon Michael
Lee, John
Spearing, Nigel


Cohen, Stanley
Lestor, Miss Joan (Eton &amp; Slough)
Spriggs, Leslie


Coleman, Donald
Lewis, Ron (Carlisle)
Stallard, A. W.


Cook, Robin F. (Edin C)
Lipton, Marcus
Stewart, Rt Hon M. (Fulham)


Cowans, Harry
Loyden, Eddie
Stoddart, David


Cox, Thomas (Tooting)
Lyon, Alexander (York)
Summerskill, Hon Dr Shirley


Crawshaw, Richard
Lyons, Edward (Bradford W)
Thomas, Ron (Bristol NW)


Crowther, Stan (Rotherham)
McCartney, Hugh
Thorne, Stan (Preston South)


Cryer, Bob
McDonald, Dr Oonagh
Tierney, Sydney


Davidson, Arthur
MacFarquhar, Roderick
Tim, James


Deakins, Eric
Maclennan, Robert
Varley, Rt Hon Eric G.


Dean, Joseph (Leeds West)
McMillan, Tom (Glasgow C)
Wainwright, Edwin (Dearne V)


Dempsey, James
Madden, Max
Walden, Brian (B'ham, L'dyw'd)


Doig, Peter
Magee, Bryan
Walker, Harold (Doncaster)


Dormand, J. D.
Mahon, Simon
Walker, Terry (Kingswood)


Duffy, A. E. P.
Marks, Kenneth
Watkins, David


Dunnett, Jack
Marshall, Dr Edmund (Goole)
Watkinson, John


Eadie, Alex
Maynard, Miss Joan
White, Frank R. (Bury)


Edge, Geoff
Mendelson, John
Whitehead, Phillip


Ellis, John (Brigg &amp; Stun)
Miller, Dr M. S. (E Kilbride)
Whitlock, William


Ennals, David
Morris, Charles R. (Openshaw)
Williams, Rt Hon Alan (Swansea W)


Evans, Ioan (Aberdare)
Moyle, Roland
Williams, Sir Thomas (Warrington)


Fernyhough, Rt Hon E.
Oakes, Gordon
Wilson, Alexander (Hamilton)


Flannery, Martin
Ogden, Eric
Wise, Mrs Audrey


Fletcher, Ted (Darlington)
Orme, Rt Hon Stanley
Woodall, Alec


Foot, Rt Hon Michael
Ovenden, John
Woof, Robert


Ford, Ben
Park, George
Wriggles worth, Ian


Forrester, John
Parker, John



Fowler, Gerald (The Wrekin)
Parry, Robert
TELLERS FOR THE NOES:


Freeson, Reginald
Pendry, Tom
Mr Joseph Harper and


Garrett, W. E. (Wallsend)
Phipps, Dr Colin
Mr Ted Graham.


George, Bruce
Radice, Giles

Question accordingly negatived.

7.55 p.m.

Mr. Eadie: I beg to move, That the Bill be now read the Third time.
The Bill has given rise to a very full discussion of nuclear issues. At this stage the most helpful course would be for me to remind the House of the content and purpose of the Bill. So far as BNFL is concerned, the Bill provides the basis for financing the company's large investment programme, which, I emphasise, relates to providing facilities required for United Kingdom nuclear pro-

grammes already approved and does not imply any commitment to a new major nuclear expansion.
The Bill provides for further capital in two ways. First, it increases the limits on Government capital payments to £300 million, which sum may be increased to £500 million by order. Secondly, it allows the Secretary of State to guarantee loans raised by BNFL, such guarantees counting against the new limits in the same way as does direct Government investment. The Bill also allows the Government to guarantee advance


payments made to BNFL under service contracts. The immediate importance of this power is in relation to the contract which BNFL hopes to conclude with overseas utilities for the reprocessing of irradiated fuel.
In this connection, I might deal with a point raised by the hon. Member for Carshalton (Mr. Forman) in Committee about safeguards. He proposed that the Euratom Treaty should be amended to allow nuclear suppliers' group safeguards to be implemented. There is no proposal at present to negotiate a new formal agreement between supplier Governments. I gave the hon. Member an assurance in Committee that I would draw this point to the attention of my colleagues in the Foreign and Commonwealth Office before the next Nuclear Supplies Group meeting. I have done this.
The hon. Member also inquired about the rate of profit under the company's proposed overseas reprocessing contracts. The actual rate of profit under the contracts is commercially confidential. I am afraid, therefore, that I cannot disclose its amount or confirm the figure that the hon. Member mentioned. I can, however, assure the House that the Government regard the proposed return as very good.
Though the provisions have not so far received great attention, the Bill makes similar provision for the Radiochemical Centre Limited. The present upper limit on Government capital payments is raised from £7 million to £15 million. Private borrowings by the company may be guaranteed, and, again, sums guaranteed count against the limit.
Finally, the Bill would allow the Secretary of State to incur expenditure on acquiring shares in the National Nuclear Corporation Limited. This power is needed to tidy up an illogical situation which, while not causing difficulty at present, might do so in the future.
Having emphasised those three points, I hope that the House will see fit to give the Bill a Third Reading.

7.59 p.m.

Mr. Gray: The Bill is being given a Third Reading in a situation of unreality. The Chamber is empty; hon. Members have other things on their minds. The events of next Wednesday undoubtedly

have a bearing on the attendance tonight, but that should not deter us from giving the Bill a Third Reading with good grace. Naturally, we were disappointed that some of our proposals to improve the Bill were not accepted by the Government, but we had the opportunity on Second Reading and in Committee of discussing the energy question in more detail than it has been dealt with in the House for some time.
The Bill is a narrow measure. The restrictions of a Third Reading debate prevent us from elaborating on some points, but I think it only right that I should repeat that, although the Bill is small, it deals with many complicated arrangements. Therefore, we are grateful to the Secretary of State for the helpful brief which he gave us in Committee at the beginning of our deliberations.
The raising of the financial limits and the permissions which the Government require to give loan guarantees are dealt with in Clause 1. The Government did not include the recommendation of the Flowers Commission in the Bill, and we were rather sorry about that, but the Under-Secretary of State in Committee gave some very good assurances that the Government were considering this matter very carefully. No doubt we can expect legislation on that subject in due course.
We criticised to a certain extent Clause 2, which deals with the financial limits. We still feel that the limits are excessive; they are greater than is absolutely necessary. In Committee my hon. Friend the Member for Bedford (Mr. Skeet), in an excellent and well-researched speech, made a very good case for the limits not being at their present level but being more in accordance with the amendment which we tabled.
Principally, the points which my hon. Friend made were that the purpose for which the £300 million was required was not very clear because the earned profits of the industry would meet the requirement. The same applied to the thermal oxide reprocessing plant in respect of which £330 million was required, but this will be customer-funded. My hon. Friend, with his calculations, had reduced the figure about which we were talking to about £415 million spent over 10


years. However, the Government have taken the precaution of setting fairly high limits, which should be very useful for them in future.
Clause 3 was not debated in Committee, and that was perhaps regrettable. We had the opportunity of debating it and perhaps we should have spent more time on it. The remainder of the Bill had a fairly good going over in Committee, and it is leaving Parliament in as reasonable a state as we could expect. I am sorry that the Government were not able to accept some of our amendments, but we welcome the Bill and we are happy to give it a Third Reading.

8.4 p.m.

Mr. Skeet: I accept that the Bill makes a contribution to the general debate, but there are one or two observations that I should make.
The commitment to existing domestic nuclear power stations is one of the reasons why we must have a Bill of this nature, and it is against this background that it must be examined, but there is no escaping the fact that the programme outlines essential work which will ultimately result in producing an acceptable rate of return on the investment provided and will considerably extend the scope and flexibility of the company's operations.
The difference between the Government and many hon. Members on these Benches is not that substantial funds are required for the programme but that provision should be made for extensive borrowing from the National Loans Fund and not from the market. If the latter course were adopted rather than the former, the borrowing limits would not have to be extended to anything like £300 million, extendable to £500 million as stated in the Bill. In fact, at the upper limit the figure represents a sevenfold advance on the existing order.
The Secretary of State said in the House on 8th February, as reported at column 1258 of the Official Report, that of the £1,500 million required for the 10-year programme only about £230 million would be required from external sources. The Under-Secretary said in Committee:
As the Committee is aware from the briefing made available to it, BNFL's exter-

nal borrowing requirement over the next two years is covered by borrowing from the private sector subject to the provision of a guarantee under powers to be taken in this Bill".—[Official Report, Standing Committee A, 3rd March 1977; c. 65.]
It is rather extraordinary that funds will not be taken from the market, although it must be recollected that if these are subject to the guarantee they will count against the borrowing limit. Enterprises in various parts of the world are undertaking exactly the same work as has been indicated here. They do not have the aid of the guarantee and they are capable of going to the market. I see no reason why a similar approach should not be made in this case. Moreover, it was intended from the start that the company should be a mixed enterprise undertaking and, hence, would operate as closely to commercial principles as possible. It is worth observing that funds derived via Section 8 of the Industry Act 1972, as amended by Schedule 4 to the Industry Act 1975, and voted by Parliament do not count against the limits imposed.
The argument on the borrowing limits comes to this. The present borrowing limit of £75 million is too small. Even though £50 million in total has yet to be taken up, a maximum of £300 million to £500 million is excessive, bearing in mind the present national economic stringency and the fact that there are many alternative sources of finance available to the company. Governments frequently talk despairingly about the ravages of inflation, which they themselves create, and then proceed to proffer it as a reason for further provision being made.
Another scapegoat is changing technology. Tens of millions of pounds may be charged to this account, but there is nothing like over-provision for cultivating administrative extravagance. It is solid commercial sense that BNFL should carry the greater part of its financial burdens, and there are many who think that it is in a position to do so. After all, it is a profitable company.
The House should note these observations. While domestic orders produce 60 per cent. of BNFL's business, on a cost-plus basis, the company has a captive market in that 13 per cent. of the electricity sector is nuclear, and if the new programme goes ahead the percentage will be even higher. The company has secured


valuable contracts for reprocessing oxide fuel elements, notably from the Swedes, European utilities and, it is hoped, the Japanese. I confidently believe that the Japanese contract will be secured, despite the inept handling of the situation by the Government. The reprocessing is administered through a third holding in the United Reprocessors GmbH, a multinational company with roots in the European Community market, and is beginning to prove commercially formidable abroad.
BNFL, through its third interest in URENCO, has achieved a share in enrichment contracts totalling £700 million for delivery in the 1980s. This also is a multinational company associating British, Dutch and Germans and it promises to be strongly competitive with its Community rivals in France. The sale of Uranium 238 has proved profitable, with export business envisaged by the Department of about £45 million up to 1985. Services are rendered in converting uranium into uranium hexafluoride. In 1975 –76 the company secured orders to supply 14,000 tonnes between 1977 and 1986 to customers in the United States, Japan, Italy and the Federal Republic.
It is worthy of observation that under Clause 1(2) it may be that customer-funded business in the United Kingdom will be extended to the provision of uranium hexafluoride. This was the Minister's suggestion, and it may come to fruition at a later date.
I pause here to indicate one anxiety that I have. I thought after having put down an amendment that the limitations on customer-funded contracts would be limited to reprocessing of oxide fuels and also to enrichment if the case should arise in future. But apparently, according to the Minister, this is an open-ended facility, and this may be secured in any other thing that BNFL might have in view. That is taking it too far, and, while there is a limit on the extent of the guarantees that may be committed by the Government, what should be covered should be laid down more specifically in the Bill.
Of course, Clause 1(2) makes provision for the Japanese contract, which, if secured, will provide the company with earnings of £500 million. On this matter the Government have been particularly inept. The possibility of the contract being secured was foreshadowed

many months ago, but delays have allowed the French to step in. Now, an unseemly contest is being conducted between the Department of the Environment, based on conservation arguments and planning permission, and the Department of Energy, with little drive from the latter to reach finality.
The result of all this national bickering is that the programme has been put out of schedule, the Japanese are dissatisfied and the construction of the oxide facilities has had to await the outcome of what could be a substantial public inquiry. Ministers would seem reluctant to talk about the contemporary picture.
Perhaps the Minister will clarify the following points. Are the Japenese utilities prepared to await the outcome of the Section 282 inquiry without in the meantime seeking or making alternative provision? That is a simple point. I hope the Minister is prepared to say that the Japanese utilities will wait until the inquiry has been completed. Are the French prepared to act as joint partners in the United Reprocessors GmbH and to stick to a half interest in the tonnage available and not take the lot?
I must repeat the point which I put to the Minister upstairs and to which I have not yet had an answer. Will an immediate grant of planning permission for storage points, which are necessary to meet the Japanese programme—be made so that construction of these ponds may be undertaken, and will this be done ahead of or during the course of the public inquiry on the thermal oxide plant'? If the Minister will give answers to these three points, I for one will be perfectly satisfied that things are going ahead as planned.
I wish to put some general observations. While I consider this to be a necessary Bill in providing the necessary funds on limits, I am not certain that we have the necessary safeguards. I am making this point in connection with the public and not the people who have looked into the matter carefully. The Secretary of State must bridge the broad credibility gap between the public and the physicist and give the public at least the feeling that the great issues which are now being debated about the plutonium economy and nuclear waste disposal are, and would seem to be, both thoroughly taken care of and completely


researched. I have no doubt about this being done, but I hope that the right step is being taken in that direction.
During the course of the Committee, we put forward certain amendments which would have implemented Sir Brian Flowers' recommendations. Instead, we have had an indication of a further slice of Bennery in the shape of a management and supervisory board associating the State, the trade unions and research and environmental representatives to manage a 1300-MW demonstration fast breeder reactor. I would call this a Heath Robinson contraption which is patently defective as the supervisory board will have limited capacity, limited expertise and limited independence either to control or to persuade the very competent management team.
I put this to the Secretary of State and I hope that he will follow some of our recommendations. After he has completed his consultations over Flowers, I hope he can bridge the gap between the physicist and the public. I hope he will put himself in the public's position and realise that while nuclear stations possess a risk, and while reprocessing facilities are reasonably sound, the public have doubts which must be dispelled, and it is up to the Government to dispel them. Meanwhile, the Bill is before the House and it should certainly receive a Third Reading.

8.16 p.m.

Mr. Eadie: With the leave of the House, I should like briefly to reply. I am grateful for the way in which the hon. Member for Ross and Cromarty (Mr. Gray) approached the Third Reading. When the hon. Gentleman said that hon. Members are thinking of other things, I was minded that this is the first day of spring, but I do not think that the hon. Gentleman meant that.
I am grateful to the hon. Gentleman for acknowledging the fact that a brief was provided in Committee, because this is a very technical Bill and we provided a brief in order that the Committee could have a good debate. I believe that it was a very good and thoughtful debate. Indeed, many hon. Members would profit greatly from reading that Committee stage.
The hon. Gentleman mentioned the Flowers Report. I still give the assurance that I gave in Committee. We can hardly meet the assurances that the hon. Gentleman seeks, because we argued this in Committee and in the ordinary traditional way we voted when we disagreed.
The hon. Member for Bedford (Mr. Skeet) made a thoughtful contribution. He always says that he is in favour of the Bill and of nuclear power, but I get the impression that he is not prepared to will the means in this respect. For some particular reason, the hon. Gentleman has at times been ultra-critical of BNFL, but that is the job and responsibility of the Opposition. I cannot accept what the hon. Gentleman said about the inept handling of the Bill by my right hon. Friend. I am sure that many of the hon. Gentleman's hon. Friends would disagree with him.
I think that having a public inquiry into this aspect of the Bill will be welcomed by many people in the sense that it will to some extent take away the uncertainty. I do not think the hon. Gentleman will carry the whole House with him in his views. Those are his views, however, and he is entitled to have them.

Mr. Skeet: What is true is that the Department of Energy gave consent to the contract with the Japanese and that a year later the matter was referred to planning inquiry by another Department, the Department of the Environment.

Mr. Eadie: We can accept responsibility for the Department of Energy, but the hon. Gentleman cannot expect us to accept responsibility for the Department of the Environment. That is what democracy is all about. I do not understand why the hon. Gentleman is protesting about the processes of democracy. He may protest about some aspects of the nuclear process, but I do not think he can protest about the processes of democracy.

Mr. Hooley: The hon. Gentleman is being unfair, because between the decision to give the go-ahead and the decision on the planning inquiry we had publication of the enormously important Flowers Report, which gave other reasons for not simply going ahead.

Mr. Eadie: I am always grateful for comments from my hon. Friends. The hon. Member for Bedford asked about


the inquiry, I am surprised that the hon. Gentleman raised this again, because we had this out in Committee. I gave a very positive answer to that question. I told the Committee that the Japanese had understood the position entirely. That is on the record.
With regard to the French attitude, I gave the hon. Gentleman a specific answer to that. With regard to his third question about predicting the outcome of the inquiry, no one, of course, can predict the outcome of the inquiry. That is why the inquiry is of interest in many people's minds, and that is why many people will be paying attention to what the outcome of the inquiry is.
I think I have answered the main points in the debate. I hope that the House will give the Bill a Third Reading.

Mr. Skeet: Before the Minister sits down—

Mr. Eadie: I have already sat down.

Mr. Skeet: The Minister says that he has sat down. Neverthless, I hope he will rise to his feet to answer my last question. Prior to the conclusion of the inquiry, will he permit BNFL to go ahead with the building of the ponds? These are essential for the collection of the spent elements coming from Japan under the prospective contract.

Mr. Eadie: I dealt with this aspect of the matter in Committee; indeed, it was dealt with on Second Reading. I ask the hon. Member for Bedford to read the reports of the proceedings in Committee and the Second Reading debate. He will find the answer to his question there.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 140, Noes 11.

Division No. 92]
AYES
[8.21 p.m.


Allaun, Frank
Graham, Ted
Phipps, Dr Colin


Armstrong, Ernest
Harrison, Walter (Wakefield)
Radice, Giles


Ashton, Joe
Heffer, Eric S.
Richardson, Miss. Jo


Atkinson, Norman
Hodgson, Robin
Roderick, Caerwyn


Bagier, Gordon A. T.
Hoyle, Doug (Nelson)
Rodgers, George (Chorley)


Barnett, Rt Hon Joel (Heywood)
Huckfield, Les
Rodgers, Rt Hon William (Stockton)


Bates, Alf
Hughes, Rt Hon C. (Anglesey)
Rooker, J. W.


Benn, Rt Hon Anthony Wedgwood
Hughes, Roy (Newport)
Roper, John


Bennett, Andrew (Stockport N)
Hunter, Adam
Rose, Paul B.


Bishop, E. S.
Irvine, Rt Hon Sir A. (Edge Hill)
Ross, Rt Hon W. (Kilmarnock)


Blenkinsop, Arthur
Jackson, Miss Margaret (Lincoln)
Rowlands, Ted


Boardman, H.
Janner, Greville
Ryman, John


Booth, Rt Hon Albert
Johnson, James (Hull West)
Sandelson, Neville


Bray, Dr Jeremy
Jones, Alec (Rhondda)
Sedgemore, Brian


Buchanan, Richard
Kerr, Russell
Selby, Harry


Butler, Mrs Joyce (Wood Green)
Kinnock, Neil
Silverman, Julius


Callaghan, Jim (Middleton &amp; P)
Lamond, James
Skinner, Dennis


Canavan, Dennis
Langford-Holt, Sir John
Small, William


Cocks, Rt Hon Michael
Latham, Arthur (Paddington)
Smith, John (N Lanarkshire)


Cohen, Stanley
Leadbitter, Ted
Spearing, Nigel


Coleman, Donald
Lee, John
Spriggs, Leslie


Cook, Robin F. (Edin C)
Lestor, Miss Joan (Eton &amp; Slough)
Stallard, A. W.


Cowans, Harry
Lewis, Ron (Carlisle)
Stanbrook, Ivor


Cox, Thomas (Tooting)
Lipton, Marcus
Stewart, Rt Hon M. (Fulham)


Crawshaw, Richard
Loyden, Eddie
Stoddart, David


Crowther, Stan (Rotherham)
Lyon, Alexander (York)
Summerskill, Hon Dr Shirley


Cryer, Bob
Lyons, Edward (Bradford W)
Taylor, Mrs Ann (Bolton W)


Davidson, Arthur
McCartney, Hugh
Thomas, Ron (Bristol NW)


Deakins, Eric
McDonald. Dr Oonagh
Thorne, Stan (Preston South)


Dean, Joseph (Leeds West)
MacFarquhar, Roderick
Tierney, Sydney


Dempsey, James
Maclennan, Robert
Tinn, James


Doig, Peter
Madden, Max
Varley, Rt Hon Eric G.


Dormand, J. D.
Magee, Bryan
Walden, Brian (B'ham, L'dyw'd)


Douglas-Mann, Bruce
Mahon, Simon
Walker, Harold (Doncaster)


Dunnett, Jack
Marks, Kenneth
Walker, Terry (Kingswood)


Eadie, Alex
Marshall, Dr Edmund (Goole)
White, Frank R. (Bury)


Edge, Geoff
Maynard, Miss Joan
Whitehead, Phillip


Ellis, John (Brigg &amp; Scun)
Miller, Dr M. S. (E Kilbride)
Whitlock, William


Evans, Ioan (Aberdare)
Morris, Charles R. (Openshaw)
Williams, Rt Hon Alan (Swansea W)


Fernyhough, Rt Hon E.
Moyle, Roland
Wilson, Alexander (Hamilton)


Flannery, Martin
Murray, Rt Hon Ronald King
Wise, Mrs Audrey


Fletcher, Ted (Darlington)
Oakes, Gordon
Woodall, Alec


Foot, Rt Hon Michael
Ogden, Eric
Woof, Robert


Forrester, John
Orme, Rt Hon Stanley
Wrigglesworth, Ian


Fowler, Gerald (The Wrekin)
Ovenden, John



Garrett, W. E. (Wallsend)
Park, George
TELLERS FOR THE AYES:


George, Bruce
Parker, John
Mr. Joseph Harper and


Golding, John
Parry, Robert
Mr. Peter Snape.




NOES


Bain, Mrs Margaret
Ross, Stephen (Isle of Wight)
Wainwright, Richard (Colne V)


Freud, Clement
Smith, Cyril (Rochdale)



Grimond, Rt Hon J.
Steel, Rt Hon David
TELLERS FOR THE NOES:


Howells, Geraint (Cardigan)
Stewart, Rt Hon Donald
Mr. David Penhaligon and


Pardoe, John
Thompson, George
Mr. A. J. Beith.

Question accordingly agreed to.


Bill read the Third time and passed.

EUROPEAN COMMUNITY (COKING COAL)

8.32 p.m.

The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): I beg to move,
That this House takes note of Commission Document No. R/2639/76 and of the comments in the Fourth Report of the Select Committee on European Legislation, &amp;c. but is mindful that the proposal is only one of several aimed at providing long term security of Community energy supplies which as a whole are likely to be beneficial.
This is a very timely debate, and although it is specifically about the European Coal and Steel Community coking coal scheme, this is very relevant to the steel industry, and therefore it may be helpful if I broaden our discussions to other matters of EEC energy policy. The Scrutiny Committee has expressed an interest in EEC energy policy, coal burn and coal stocking, and also the House is very interested in JET.
Next week, on 29th March, the Energy Council meets in the morning and the Research Council in the evening of the same day. As I shall be in the chair for the Energy Council, this debate provides an opportunity for me to outline the Government's approach.
Of course, JET is not in any case on the agenda, because that subject is for the Research Council to deal with, and the Minister of State, Department of Industry will be chairing that meeting. However I shall take the opportunity to tell the House that the Government are taking very vigorous action to canvass the cause of Culham, because we believe that there is a very strong case for it, and naturally we hope that we can persuade Ministers of the Research Council to share that view.
Before I come to the particular proposals that we are discussing I shall say something about the development of EEC energy policy.

Mr. Tom King: The Secretary of State has introduced a subject that is not strictly within the coking coal situation—that of JET and Culham. We do not quarrel with that. What is the time scale, as the Government see it, in relation to contracts of employment already in existence for personnel at

Culham? A decision on the time scale is imperative.

Mr. Benn: I fully understand the hon. Gentleman's intervention. In referring to that matter I was only trying to complete a range of the issues that are of concern and interest to the House. We are anxious to make rapid progress. The Commissioner recently made a statement suggesting that this matter should be settled urgently, and I agree with him. However, I cannot answer the hon. Gentleman's question specifically, except to say that we hope that we shall obtain an early decision.
I hope that it will be convenient now to deal with our approach to energy policy as a whole. There is no doubt that for the whole Community, as for the United Kingdom, a successful approach to energy policy is necessary, given the dependence of the Community as a whole on world fuels. Little progress has been made in the past and part of the explanation may lie in the fact that the approach was centralised, whereas these issues are extremely important for member States and their interests do not always correspond.
Therefore, I have tried a consultative approach in making two tours to capitals—one in the autumn of 1975 and, secondly, as President of the Council of Energy Ministers in January of this year, when I sought an understanding of the position of Ministers on matters that were coming up for decision. I urged that we should try to make progress on the building block principle of finding the points that are agreed, seeking informality in our manner of dealing with these matters, primacy of ministerial control, and a measure of realism in our approach.
We now have an agreed work programme. I suggested to my colleagues, following my recent tour of various capitals, that we should consider a more open policy of discussion within the Community on a matter that concerns everybody—namely, the conservation of energy, on which papers have been submitted by the French and on which there is great interest world wide.
My argument is one with which the House will be familiar in domestic energy terms—namely, that we cannot achieve a successful policy without a full programme of consultation and without


public opinion being aware of the choices. Since nobody is arguing for federal control of energy resources belonging to member states, our best chance of harmonising our interests lies in the methods I have described.
The view expressed by all the Ministers whom I have met recently is that we should make an early approach to the Carter Administration in the United States. I hope to see the United States Secretary of State when he comes to London shortly, and in two weeks' time, when I visit Washington, I shall see Mr. Schlesinger, who has been given responsibility for establishing a Department of Energy in the United States.
As for Britain's position on Community energy policy, let me emphasise that we are the largest energy producers in the Community. I have given the figures to the House on other occasions, but I shall now refer to them briefly. A figure of 27 per cent. of all investment in energy in the Community is British, 33 per cent. of all investment in coal is British, 51 per cent. of all investment in oil is British, and we have unrivalled experience in operating nuclear power stations. Any British Minister is bound to be taken seriously at the Energy Council, as indeed British Ministers are.
We have an interest in seeing that our position as the major producer is given due respect and regard. We have an interest in the investment and the protection of that investment. Quite clearly, we have an interest in sharing the cost of research and development, in as much as that can be achieved. JET is one example of that.
The specific interests are well known to those who follow these matters. The first is the minimum support price, and we have urged our case strongly in the Council of Ministers. Although the matter has not yet been agreed, I have pointed out to my colleagues in Brussels that, with our heavy investment in oil and in coal, a support price is a necessary and reasonable objective of Community energy policy.
We also have a great interest in opening up our market for coal in the Community. The Community is a historic market for British coal and we should like to see it reopened and developed. Therefore, we have an interest in the imports of coal

that are making it difficult for the Community to develop greater independence in coal production and use. We are interested in stimulation of the coal bum and in the conversion of power stations to coal burning. In the interim we are interested in a proper coal stocking scheme. We are also concerned—and this is of international interest—in the development of a conservation programme, since there is a massive gain to be made here for every country in the Community and elsewhere.
Every member State with which I have had discussions has expressed an interest in the Euratom loan scheme that was proposed a year ago, but not then agreed as part of the package and on which we have a reservation, as on coking coal itself. The formation of a policy has been slow, although we reached agreement in December on emergency sharing provisions in the event of an oil shortage.
We are now looking for proposals to reduce our dependence on imports and to stimulate indigenous fuels. We are awaiting proposals from the Commission on stock provisions, on provisions for stimulating coal burn, and on the protection of investment—and I should include MSP—but none of these is ready for the Council meeting next week.
I now turn to the coking coal proposal that is the reason for tonight's debate, but I hope that the sketch that I have given of the Government's approach will make it easier for the House to understand what I have to say about coking coal.
At present the ECSC provision for coking coal is based on a scheme that allows protection subsidies on coking coal against American and Australian prices and a sales subsidy when there is a transfer of coking coal across the borders. Almost all of this benefits the Germans. It is worth about £20 million a year and is paid for by a production levy and by some contribution from ECSC funds.
There is no requirement that the British Government should pay anything towards the scheme, but the British Steel Corporation is levied under the scheme. That levy at present goes to the British Government under the arrangements that were made in 1973 and it does not go across the exchanges to Brussels.
Because the scheme was thought likely to be temporary, it was intended that the rate of support would lessen during 1977 and finish by the end of December 1978, but it has now been found necessary to continue the support. The Commission proposal that we are now discussing is that the scheme should be extended to 1985, that the annual tonnage covered should be raised from 15 million to 18 million and—this is of great concern and a matter on which the BSC has made representations—that the United Kingdom contribution at present paid mainly by the BSC, with smaller amounts from Ford and GKN, should be diverted to Brussels. That would mean that £2 million would be transferred across the exchanges through the Treasury to the Commission.

Mr. John Ellis: Since it is suggested that the tonnage should be raised from 15 million to 18 million, will not the £2 million be updated by that amount?

Mr. Benn: That is a marginal matter. It is important that while in 1975 it was agreed that the British contribution would be paid to the Government by the BSC, it is now proposed that it should be diverted to the Community.

Mr. Julius Silverman: Will not the Federal Republic be almost the sole recipient and beneficiary of this arrangement?

Mr. Benn: I said a few moments ago that the Germans were the main beneficiaries under the coking coal scheme. It was agreed that the tapering off, which was to begin in January 1977, would be stopped and that we should have a little more time to consider the proposals.
The attitude of the United Kingdom is that there is no great significance for us in the extension to 1985, although the extension alone would mean that the BSC, Ford, GKN and others would continue to pay money into the Treasury. The BSC has expressed a vigorous view on this and it is contained in an annex to the Scrutiny Committee's report. That is why it has urged us to look critically at any extension of the scheme.
The increase of the annual tonnage with the payment of £2 million to Brussels, to come to the point of my hon.

Friend the Member for Birmingham, Erdington (Mr. Silverman), is a serious matter for us. The BSC does not benefit much from the scheme and the proposals would add a burden across the exchanges.
Since our situation is still as it was in 1973, we see no reason to change the existing arrangements. However, there are factors which have to be taken into account, and that is why I went a little broadly in my opening statements.
If we are to consider Community energy policy—and, although I have no experience of other councils, the position may be similar there—there is an element of bargaining or package dealing. We are concerned about certain other matters that would be of specific benefit to us. One is stocking aid for coal, where it is necessary that the coal industry should be able to stock coal pending development of its markets and the recovery of Western economies.
Secondy, and of equal long-term importance, it is necessary to take advantage of any provisions for Community support for conversion to coal-burning capacity. Thirdly, and even more important, at least in the short term, we need some import licensing arrangements to allow us to monitor cheap coal imports into the Community.
We know that these proposals are up for consideration and we hope that the Energy Council will find it possible to reach an agreed line. It will not be possible for progress to be made on all these matters next week, though I hope that we shall make progress at the second Energy Council meeting that I shall be chairing in June.
I invite the House to understand that my attitude towards the coking coal arrangements that will come up for discussion next week is conditioned by general reaction to the possible development of other schemes which would be to the benefit of the United Kingdom. That is the spirit in which I intend to approach the Council meeting on 29th March.
There is bound to be an element of give and take in all these matters and I very much hope that there will be good will in the spirit that I have tried to establish and in the harmonisation of approach between this country and other member


States and that there will be a constructive attitude to the needs of the United Kingdom in the development of policies. Subject to anything that is said in the debate, I hope that the House will endorse that general approach.

8.50 p.m.

Mr. John H. Osborn: I welcome the fact that the Secretary of State will be presiding over the Energy Ministers' meeting next week and that he has chosen the debate on this motion, particularly Document R/2639/76, to look at this problem in a wider context.
I have been asked to speak for the Opposition as a member of the Energy and Research Committee of the European Parliament. I assure the right hon. Gentleman that he was welcome at that Committee's meeting when he came to Brussels. I hope that his example will be followed by other Ministers. Of course, we have had former Conservative Ministers talking to committees of the European Parliament about the problems that they face. Therefore, I speak not only for the Opposition, but as a member of a Committee that has been dealing with these issues in the European Parliament.
To a certain extent I must and intend to speak from a Community point of view, as the right hon. Gentleman did, and to look at the problem in the wider context. Of course, I might also look at the matter from a steel point of view, as I represent a division of Sheffield. But the Sheffield blast furnaces are rapidly vanishing to coastal regions where most coking coal is used.
There have been debates on energy policy and recently on a minimum price for oil on the Giraud Report in the Assembly of the European Parliament. No doubt the Minister has studied that report.
We have before us a document dated 4th November. I shall concentrate on the narrower side first and then respond on some of the issues that right hon. Gentleman has put to us.
This debate is of value. I praise the work of the Scrutiny Committee. I hold the view that the scrutiny of European legislation is second to none in this House and country though certain Mem-

bers from other member States may slightly disagree with me. The work of the Scrutiny Committee has brought home to me the fact that some aspects of this problem were not considered by the Energy Committee of the European Parliament because it did not have the full benefit of the wisdom of the British Steel Corporation last year.
Although the scheme that we have been operating for some time makes sense to the Community, I accept the view expressed by the Minister and the BSC that it is of no advantage to Britain, the time scale is interesting. On 11th November the Commission asked the European Parliament for its views. On 25th November M. Krieg was appointed as rapporteur, or draftsman. On 30th November the Energy and Research Committee, which the Minister visited, gave the proposals a favourable passage. I was present at that meeting
When we looked at the proposal, several points were brought up. We referred to the implementation of energy guidelines drawn up by the European Council in December 1975 and to Community guidelines, which stressed the need for a system of aid for coal and coke. The Parliament had requested the Commission to ensure that the current subsidy schemes, which had proved successful in the Community, should be extended. Therefore, as a Member of that Parliament learning of these doubts now I appreciate the value of the Scrutiny Committee.
In the report a difference was made between two types of aid: production aids at an annual rate per coalfield and aids for the sale of coal. The difference has been stressed subsequently by the British Steel Corporation.
Amendments were made to a number of articles in the report by M. Krieg and the matter was referred to the Council and to the European Parliament forthwith. That open dialogue and consultation with the European Parliament by the Council and Commission is improving and is to be welcomed.
The Committee on Budgets—the noble Lord Bruce of Donington was acting chairman—pointed out that the estimated cost of the proposal before us would be reflected in an increase in the special fund for inter-Community sales aid from


30 mua to 36 mua, which is probably to what the Secretary of State referred. But the Budget Committee of the European Parliament approved this as well. This went through the European Parliament on 17th December. We should all support the idea that we should look at this again and decide on an overall perspective what is the best way of handling it.
I return to the subject of sales aids, which the BSC does not like. As the Secretary of State pointed out, these are the difference between the subsidised costs of Community coal at pits and the cost of imported coal at steel works distant from Community pits, and this mainly involves across-frontier sales. This applies particularly to steel works in Holland, France and Italy. Outside sources of supply include United States and Australian coal.
There is no green pound for these calculations. Payments are made in units of account. As the pound has declined, the BSC has told me that the burden on the BSC has been that much more severe. The Secretary of State has already referred to the agreement made at the time of British entry into the EEC whereby, because the NCB sells and the BSC buys no coking coal on the Continent, it was agreed that on entry the United Kingdom should be part of a scheme for production aid purposes that would effectively exclude sales aid. This was agreed when we entered the Common Market. There is no contribution from the Government to Community sales aid funds, and the BSC levy contribution is paid not to the Community fund but to the Government. It was understood that the BSC levy should be recycled to the BSC. It has now ceased, on the insistence of the Commission, which creates some urgency.

Mr. Silverman: It would be wrong to say that it has now ceased. It will cease if the new legislation comes into operation.

Mr. Osborn: No. I understand that it has ceased already. Perhaps the Secretary of State can confirm this. That was the information that I was given. Perhaps he can clarify whether it will cease.
Conditions in this country are almost totally different from those on the Continent. I agree that we should be subsidising the German Government and

other Community steelmakers. Therefore, this should be looked at again. With coking coal Britain has an advantage in being almost entirely self-sufficient, although 1·3 million tons was imported last year, of which the major proportion came from the United States and Poland. An examination of the payments indicates that Community countries other than Britain would pay 16½ million units of account and receive 27 million units of account, so the other Community countries do considerably better than we do.

Mr. John Ellis: The hon. Member for Sheffield, Hallam (Mr. Osborn) prefaced his remarks by saying that he would be supporting the case in favour of steel, but everything that he has said has been against the steel point of view. He said that the Opposition would support it.

Mr. Osborn: The Opposition are supporting the Secretary of State's line, because he is renegotiating the proposals that have gone through. The Secretary of State knows perfectly well that, once a measure has gone through the European Parliament, it is then looked at by the Council of Ministers.
Had the British Steel Corporation gone to the European Parliament and explained the point of view put to the Secretary of State for Energy when the matter first arose, and had the Corporation given Members of the European Parliament from this country the information that it has given the Select Committee in the last few weeks, this matter would have been looked at more closely then.
The problem is how better to make use of the dual mandate and ensure that European Members from the British Parliament balance national, or even local, interests against Community interests.
The British Steel Corporation and the other industrial groups may realise that they do not necessarily have to go to the Commission only and may think that they can go to our Ministers instead. So they feel that they do not have to go to the Economic and Social Committee with their views, but there are, however, 36 Members of this House and of the other place who are able to represent their views in the European Parliament. Had those groups represented this point


more forcefully to us at the time, we would have discussed the matter with the German and French Members.
But, as the Minister pointed out, coal for coking presents problems, and the BSC is very anxious to widen its sources of supply of coking coal from this country so as to ensure adequate supplies. The developments by the British Steel Corporation, such as that at Normandy Park steelworks at Scunthorpe, using Phurnacite-type fuel, should be pursued.
The Minister says that he will look at this matter again in the Council of Ministers. I hope that he will send it back to the Commission and that the Commission will put revised proposals both to the Ministers and to the European Parliament, and that after that debate the members of the Committee will take a fresh look at the situation.
In his wider appreciation the Minister pointed out that we are as dependent on the oil-producing countries as we were three and a half years ago. He referred to the importance of the nuclear programme, a subject which was debated earlier this evening. There have been cut-backs. The aim was to have had a 200 GW programme. It is now possibly 85 GW and this could ultimately be a programme of 130 or 140 GW. That means that we must look to conservation and to geothermal and solar energy. Alternative energy sources must be considered. My colleague Senator No é from the Italian Parliament has carried out a report on solar energy. Conservation has been considered by the Commission.
If the Secretary of State can accelerate harmonisation so that we achieve common standards I should welcome that. Mr. Springorum, the German Chairman of the Energy and Research Committee, produced on 10th June guidelines for a Community coal policy. I presume that the Minister has received this. Mr. Springorum wanted to stabilise the market for hard coal and deplored that hard coal production was falling in the Community. We are faced with that problem in this country. He wanted aid for coal to be made obligatory, not optional. That report and the report by Mr. Burgbacher on stockpiling are most important.
The Minister called for us to make the best use of our energy resources. The Community document has been discussed and will be the subject of a report by Lord Bessborough, who is a member of the Energy Committee, on the funds being made available to provide inducements to the Community's electricity producers to put in operation some 300 GW of coal-fired production by the early 1980s. Lord Bessborough is dealing with the question of 30 per cent. grants spread over a shorter period. These are all part of the measures concerned with the use of coal.
The Secretary of State has been President of the Energy Research Committee of the European Parliament. It is therefore important that hon. Members should have his views. I am grateful that he has put them forward. The right hon. Gentleman referred to JET. That subject hag been before the Committee. The Commission reached a decision a year ago. I welcome that the Minister toured the capitals in the autumn of 1975 and again this January to see what were the requirements of the various members. Perhaps there is other work that we could study, such as the use of tidal energy and the use of hydrogen as an energy carrier. I welcome the Secretary of State's forthcoming talks with Mr. Schlesinger, because, through the International Energy Agency, it is essential that, at a high level as well as elsewhere, we should know what both the Americans and the Canadians are doing and that they should know what we and the Community are doing.
The right hon. Gentleman has rightly stressed how much of Britain's energy supplies come from its own resources. He has discussed the importance of the minimum support price for oil. There have been differing views about that. Mine were made clear in the debate in the European Parliament—the rapporteur was a M. Giraud. They are that to a certain extent the minimum price support is irrelevant provided we are in world surplus.
My hon. Friends have differing views on the matter, but in the Energy Committee of the European Parliament we have tended to take the view I have expressed, because whatever investment has gone into Continental Shelf oil must not be undermined by commercial practices,


whether from established oil-producing countries or, perhaps, some of the member countries of the EEC which would benefit from the purchase of cheap oil at the expense of our investment. This is a complex issue.
This debate is of value and an experience because it highlights the importance of the Scrutiny Committee and of the importance for industrial groups, whether nationalised industries or in the private sector, to be able to make their views known to the 36 British Members of the European Parliament in good time. I hope that the Secretary of State will now take steps to ensure that that happens.

9.8 p.m.

Mr. Julius Silverman: In the absence of the right hon. Member for Bournemouth, West (Sir J. Eden), who is Chairman of the Scrutiny Committee, I, as acting Vice-Chairman, have been asked to raise this matter and explain the Committee's point of view and why we published the paragraph we did.
The hon. Member for Sheffield, Hallam (Mr. Osborn), whom I thank on behalf of the Scrutiny Committee for his kind words about our work, has tended to broaden this into a general debate on energy, particularly energy conservation. The Committee has submitted to the House, apart from this instrument, four other documents for debate—one instrument and three consultative documents—which will allow the House to debate the issue of energy and energy conservation in the EEC in a much wider context than this debate. The Committee was concerned in its deliberations solely with this instrument, however.
The major evidence that we received, apart from the evidence of the Department, was a communication from the British Steel Corporation, and I think that it is proper that I should read it, because it sets out the Corporation's view perfectly clearly, and if it is true, as the Minister says, that this must be considered as a sort of package with other energy matters and it is necessary for the Government to make concessions on the matter, at any rate the Committee thinks that the Government should realise how serious this point is and what is being given away in exchange for what we are getting for it. The document from the

BSC puts the case and the history clearly. It says:
The Energy Ministers of the Community are meeting in Brussels on Tuesday 21 December to consider proposals for a number of decisions in the Energy field, including an extension and modification of the current ECSC coking coal subsidy scheme. If any of the various proposals in respect of the scheme now before the Council of Ministers were to be adopted the financial consequences for the British Steel Corporation would be serious.
The Corporation has no objection to that part of the scheme which authorises Governments to subsidise production of coking coal.
That presumably means that it has no objection to the present situation being extended.
Our concern is with the second part of the scheme which provides for a Community fund, financed partly by Governments, but mainly by a levy on steelmakers, from which sales subsidies are paid on coking coal delivered across frontiers to steelworks distant from the pits.
The origin of this scheme long pre-dates UK entry into the Community; it was conceived at a time, before the oil and energy crisis, when some system of Community sales aids may have been desirable in order to make Community coking coal competitive with the much cheaper imported coal.
In the new circumstances following OPEC and its aftermath, the scheme may still serve a purpose in helping to maintain Community coking coal production at the desired level. But what is absolutely clear is that in no real sense has the system of sales aids any relevance to the conditions which prevail in the UK.
The NCB sells no coking coal in the Community; whilst the BSC purchases almost the whole of its requirements from NCB.
I interrupt that to say that I think the total amount of our coal imports is just over 2 million tons, of which only a part is coking coal and practically none of this comes from the Community; it comes from third countries.
Basically, therefore, conditions in the UK make it unlikely that this country will ever benefit from the Fund; and, as in the past, the principal beneficiary can only be the Ruhr coal industry, and indirectly the German Treasury.
The special position of the UK in fact was fully recognised in 1973 when the scheme in its present form was negotiated in the Council of Ministers. Under an arrangement effectively removing the UK from the scheme, the British Government was exempt from making any contribution itself to the common subsidy Fund: BSC was required to pay a levy on coking coal consumption on the same basis as other Community steel producers; but it was agreed that the money should be paid not into the Community Fund, but into a special account


in this country, and the proceeds were made over to HMG. The 1973 agreement in the Council of Ministers said nothing about the disposal of the money accruing to the Government, but it was understood by all concerned, including the Community steel producers, that the logic of a special UK arrangements required HMG not to pocket the money but to recycle it back to BSC. HMG acted accordingly and arranged for the money to be returned to the Corporation via the NCB.
Unfortunately, however, this recycling arrangement has now come under attack from officials in the Commission who deny that it was ever the intention that the money should be refunded to BSC. They maintain that this puts the Corporation at an unfair cost advantage vis- à-vis its competitors, and that the recycling constitutes therefore a Government subsidy contrary to the Treaty of Paris. They insist that in future the BSC must be treated no differently from other producers in respect of this levy.
The various proopsals for extension of the coking coal subsidy scheme now before the Council include one from the Commission which would put an end to the UK special arrangement in its entirety. But the proposal which seems to command most support is that put forward by the German Government. They are naturally keen to renew the scheme, and are prepared to continue to give the British Government a special position; but not however the BSC. Under this proposal the British Government would continue to be exempt from making the contribution to the Fund; BSC would continue to pay the levy into a special account in the UK; HMG would be free to use the money for any purpose except because of the Commission's objections, for recycling to the Corporation.
If the Corpoation has to subsidise anyone, clearly it is better that its own Government should be the beneficiary rather than the German coal industry, but any scheme which is set up to subsidise the Community coal industry and whose result in the United Kingdom is to require British Steel Corporation to subsidise its Government must be inherently absurd and requires radical review. The absurdity could perhaps be tolerated if the price of Community solidarity were to be small. But the amount involved is substantial —the levy on coking coal consumption by British Steel Corporation amounting to about £2 million a year, on top of the steel production levy which currently costs the British Steel Corporation £7 million a year.
That makes £9 million in all.
The letter continues:
In our present financial difficulties we cannot support an additional cost of this magnitude. We are strongly of the view that any extension of the scheme should be on the basis of: —

(a) full United Kingdom exemption from the sales aid aspect of the scheme, the Minister exercising his right of veto under Article 95 of the Paris Treaty if necessary;

(b) failing this, a clear understanding by all concerned, including the Commission, that in one way or another Her Majesty's Government must be allowed to channel money back to the Corporation",

which, of course, is the present situation.
That forthright and clear letter, which sets out the position both historically and economically, is based on three points: first, that the proposed scheme is unfair for the British Steel Corporation; secondly, that the United Kingdom is in an entirely different position from the rest of the Community and the position there is irrelevant to the situation in the United Kingdom; thirdly, that it would seriously erode the competitive position of the British steel industry in an extremely difficult situation. Those are the views of the Corporation, and those were the views that the Scrutiny Committee had on board in making its presentation to this House, in recommending this matter for debate, and in publishing the paragraph that it did.
We as a Committee appreciate that here and there the Minister may have to negotiate, that there may have to be give and take, and that, in substance, a large part of Community legislation is legislation by negotiation. Nevertheless, it seems to me that, whatever advantages the Minister may get from other fields of energy association, this matter should be dealt with separately.
Incidentally, I say in passing that I wonder whether this is a matter of energy. In substance, coking coal is not used as a source of energy in the steel industry, but is an essential raw material in the manufacture of steel, and possibly it comes outside the question of the energy arrangements. It is something different, which is probably why the Committee dealt with it separately.
I have no doubt that during the 12 months that are available for reflection and before further negotiations the Minister will pay due attention to the serious views put forth by the British Steel Corporation and by the Scrutiny Committee.

9.19 p.m.

Mr. Michael Marshall: I welcome the debate and, indeed, the suggestion by the Secretary of State and my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) that this subject needs to be considered in a wider context. I pay


tribute to the Scrutiny Committee for its work, and, like the hon. Member for Birmingham, Erdington (Mr. Silverman), I wonder why this matter should be looked at in an energy context as opposed to an industry one. That is a matter that I should like to consider in some detail. I think that this wider view is important.
I realise why the British Steel Corporation should seek to get the best possible deal that it can for itself. It would be failing in its duty if it did not do so, but the Secretary of State, as he goes into a period of negotiation, will, I hope, take a wider view of this subject. As one who, as a member of the Select Committee on Nationalised Industries, has just returned from talks with the Commission and with the Belgian and German steel industries, I felt it right to give some views which from my standpoint seem clear both as to the Commission's attitude and as to that of other European steelmakers in looking at the future of coking coal both for the British Steel Corporation and for the European steel industry as a whole.
The Secretary of State struck the right note when talking about the factors which have to be taken into account. Paragraph 3(1) of the document contains the words:
As regards coking coal, this involves firm, long-term commitments on the part of the iron and steel industry.
This is the context in which we should look at this subject and it was the theme of the hon. Member for Erdington. This is the point at which we should try to look for a moment in a wider context. I hope that in replying the Secretary of State will pay some attention to my questions.
In passing, I declare an interest as one who started his life working in the coke ovens. This is a privilege which, I believe, is shared only by the hon. Member for Redcar (Mr. Tinn), who is a Government Whip. The whole future of the coking coal industry depends on the way in which the British Steel Corporation operates its coke ovens and the way in which it will operate those ovens in future in relation to other European developments. The first new feature we face is what I detect to be the increasing rationalisation of production facilities within Europe.
It is noticeable, as one travels around, that there are out-of-date coke ovens in

operation in various European plants. By the same token, and this is the way to look at these matters in context, whatever the immediate short-term argument may be about the British Steel Corporation and the levy, we must not forget that in the past three years the BSC has been able to draw £246 million in loans from the Commission on favourable terms with guarantees as to the foreign exchange situation through the Treasury. That sum of money has provided a substantial underpinning for construction of new coke ovens, which we welcome. These are part and parcel of the balance which we must strike.
If we look at the way in which the Community is moving towards product specialisation, it is important to decide where Britain will stand as a coking coal producer over the coming years. There are various other factors which will bear upon this. First, if we look at the situation as it stands, it is true that we depend almost entirely on imports of coking coal. We must do so until we get round the problem of the high ash content of our own domestic supplies. That situation is also true for other European steel manufacturers who produce coking coal. It is my contention that there will be opportunities in the future, certainly within the period envisaged in the agreement, for this country to be an exporter of coking coal. If we ignore the fact that we are an island with coastal works, we are ignoring one of the major advantages open to us within the Community.
I would have liked to hear more of some of these broader issues. I accept that the Secretary of State has departmental responsibilities. I am rather concerned about what the input of the Department of Industry is. On the technological level—having touched on finance and marketing—this country now has a direct stake in the direct reduction process. At Hunterston we are going ahead with ideas which will substantially reduce our offtake of the normally produced pig-iron and eliminate the use of coking coal. To that extent there is a definite interest in this country in the opportunities to sell and export coking coal, which is possible. On the other hand, technically we must also be aware that we may find, over the years, that our views on these matters change, depending on the Hunterston experience.
I have put three problems which seem to be particularly relevant to the British Steel Corporation and to the country in terms of finance, marketing and technology. I have two specific questions. First, what is the input of the Department of Industry in the three areas I have mentioned?
It is right to return to a theme which some of us have developed on a number of occasions concerning our worries about the way in which, in matters affecting the BSC, the Department does not take a positive rôle but seems to follow on the coat tails of the Corporation. I understand fully why the Corporation should wish to fight for its corner, but I look for a clear, far-sighted and, above all, overall view from the Department on where Britain's best interests may lie. Therefore, I should be interested to know what the Department is putting forward in these matters and to what extent its views will be reflected in the Secretary of State's conversations.
Secondly, I should like to hear what the BSC thinks, because if it is to be part of a greater rationalisation of production facilities, if it is to be part of a product specialisation, I wish to know in what areas it expects to thrive and whether it supports my contention that there are opportunities for it to be an exporter of coke.
What worries us above all is the feeling that we deal with these matters in a rather sterile fashion. We consider the documents and proposals which come before us in the sense that they exist and, therefore, we have to do something about them. I ask the House to think about them in a fundamental way, because unless we consider them on a longer-term basis we shall miss opportunities to take a broader view, which is what this matter is all about.

9.26 p.m.

Mr. John Ellis: Kind words, which I echo, have been said about the Scrutiny Committee, but there is one point which I should like to bring to its attention.
Scunthorpe is a steel producer. Being interested in this subject I went to the Vote Office, where I was able to obtain certain documents. The key to the matter was the letter to which my hon. Friend

the Member for Birmingham, Erdington (Mr. Silverman) referred, but it was not available in the Vote Office. I had to go to great trouble to discover that the letter from the British Steel Corporation, which is salient to this subject, was available and, in fact, had been deposited in the Library. I ask my hon. Friend the Member for Erdington to ensure that the Select Committee takes note of that point so that it may ensure that hon. Members may more easily find useful documents which are referred to in its reports.
Complimentary remarks have been made about the Select Committee, and it is right that we should say something complimentary about the British Steel Corporation. Its letter is a key to the subject that we are discussing. The fact that it wrote to the Select Committee is perhaps primarily why the letter came to the notice of the House. It was not the private sector—although it will be equally affected—but the Corporation which wrote the letter.
The inadequacies of the Common Market have once again been demonstrated. Those in the Steel Community in Europe were faced with the problem that, because some countries do not have coal or a coke-producing potential, or because in the case of other countries the commodity had to be transported long distances, in order to deal with the question of imports from outside the Common Market a fund had to be devised to provide a subsidy. When we joined the Common Market we were approached to take part in the scheme. We said that it would be of no benefit to us because we did not obtain coke or coking coal from long distances.
A compromise was therefore arrived at, with Government support, and an account was opened with the Treasury. I understand that our levy was about £2 million a year. Every year, religiously, the British Steel Corporation and the private sector paid this £2 million levy and deposited it in the account with the Treasury, and every year the Treasury said "We will give it back to you." That is a ludicrous situation. The whole matter arose as was said in the letter from British Steel:
Unfortunately, however, this recycling arrangement"—
that is the polite way of putting it—
has now come under attack from the officials in the Commission who deny that it was ever


the intention that the money should be refunded to BSC.
What is proposed now is that a scheme which envisaged 15 million tons of coking coal should be updated to 18 million tons, so that our contribution shall be made larger and we shall now pay into the fund on a scheme in which we have no interest and from which we have no benefit. But, for the time being, we shall keep the account going and deposit with the Government this £2 million. The only restriction is that we do not give it back to the BSC. The Government get some advantage from it, and that is better than having it go elsewhere into foreign countries.
During his speech, the hon. Member for Sheffield, Hallam (Mr. Osborn) said that he represented a steel constituency and was looking at this matter from the point of view of steel. I, too, look at this from the point of view of steel, because that is my job in this House. I understand my right hon. Friend's position. He has to negotiate and to make the best he can of the situation. If there are advantages in stocking coal or making subsidies available to coal-fired power stations, he must do the best he can. However, the hon. Member for Hallam criticised this arrangement in detail and then revealed that he would support it. From my point of view, this is not acceptable. I feel that it should be opposed.
One of the arguments that we can use in the Common Market, because this is a matter which arises in Europe itself, is that there should be fair competition and that the most efficient should do better. It may suit Europe as a whole to say "We have this problem with our steel industry where we are dragging in coking coal from a long way off." This is the natural advantage that we have. This whole idea goes against the principles of the Common Market itself. It is arranging a subsidy for coking coal which is to the benefit of certain sections in Europe, namely, the European producers, rather than to the benefit of ourselves. I think, therefore, that we ought to fight this proposition on that ground as well.
It seems to be crazy to set up a fund, to levy the BSC £2 million, to place it in an account in the Treasury, and then give it back again to the BSC. That is ludicrous and stupid. But, on the whole, the BSC is still getting the benefit of it.

However, I shall object strongly if we are to lose this amount of money for steel. It is my job in this House to be concerned for the good of the nation as a whole, but it is also my job to look after my own corner. If we are getting advantages for the nation in certain other areas and in certain other industries, the Minister should take note of them. When he conducts his renegotiations, however, I hope he will make it clear that when this matter was debated in the House certain of us vouchsafed our objections in principle and in detail.
Having looked at the BSC's position in detail and in principle, I feel that it is right for my right hon. Friend to say to Europe "We are a special category. In the interests of the Common Market, you are distorting free trade. What is in it for British Steel?" It is right that we should get an amelioration, equal to the amount we are putting in, to the benefit of British Steel in particular.
If this kind of money were available, I would certainly think that it could be used in the interests of my constituency in particular, and of the nation in general, by investing in a new blast capacity for more iron at Scunthorpe, which we need to go with the excellent steel-making facilities that we already have.

9.36 p.m.

Mr. Frank Hooley: I do not know whether it is a coincidence, but there was a report in The Times the other day about coking coal finds in Australia. It reads:
British and European steelmakers are to benefit from a new source of high-quality coking coal in Australia which is to be developed by a consortium which includes the national Coal Board.
Queensland has awarded an exploration licence to a subsidiary of Overseas Coal Development which could lead to about 200 million tons of high quality coking coal being made available to Europe's steelmakers.
In these discussions we have been concentrating our minds on various financial fiddles so beloved of the Common Market—we pay this and someone gets it back, or someone pays that and it goes into this fund, and eventually it cycles all the way round. I understand that coking coal is a scarce and extremely valuable resource in Europe. It is not infinite and there is not as much of it as we should like. I am therefore


wondering whether we ought to look at the problem of adequate supplies in a rather wider context than Europe. It would certainly appear that the National Coal Board is doing that and, I am glad to say, it is taking a very active interest in the large deposits that have apparently been discovered in Australia.
In this matter, as in so many others, it is quite foolish to talk as though Europe existed as an energy island. It does not. No discussion of energy problems can be confined to the context of Western Europe. Even a country as powerful and rich as the United States is not an energy island to itself. Western Europe certainly does not enjoy the various energy resources that the United States enjoys.
Therefore, we ought to hear something from the Secretary of State about the best balance—in physical and not in monetary terms—between the use of our coking coal resources by Europe and ourselves and the resources of this important raw material to which we may reasonably have access in Australia and possibly other countries. It may well be that the best interest of Western Europe is not to subsidise the production of this raw material and use it up in a decade, or a decade and a half. It may well be more sensible to obtain some of it much more cheaply from a friendly country, such as Australia, and to balance the use of indigenous resources against the importation of this raw material from elsewhere.
I am not sufficiently expert on coking coal or steel-making as to give a personal judgment on this matter, but I think that when we discuss energy we should discuss it in a world and not in a purely West European context.
The other interesting point was made by the hon. Member for Arundel (Mr. Marshall), who pointed out that there are experiments going on for direct reduction steel-making which do not involve the use of coke at all. I do not know how far these experiments have gone, or whether they point to a totally new way of producing pig iron.

Mr. Michael Marshall: Would the hon. Member care to accept that those of us who visited the Korf works found that the Russians have ordered 16 plants with 400,000 tonnes capacity to work on one

site with a total output of more than 5 million tonnes? This will equal the large integrated steelworks and traditional blast furnaces. We are going into an area in which large plants are being used in a practical sense and this may alter our thinking in the time scale of this agreement.

Mr. Hooley: That is a very fair point. This clearly has a bearing on policy in relation to the exploitation of European sources and the possible future import of coking coal. We should examine this problem not just from the point of view of fiddling about with million-pound subsidies here and there, but consider instead how important it is to use up or not use up the physical resources of this important raw material.
The Secretary of State said in his brief opening remarks that he wanted to use this opportunity to broaden the debate into the general discussion of energy problems, and since that is apparently in order I wonder whether he would tell us his views on the development of the nuclear argument in terms of Western European energy supplies in the light of the quite serious social disruptions that occurred recently in West Germany. There have been violent protests against the siting of nuclear power stations. These have occurred wherever the federal authorities have wanted to put nuclear power stations. Some Lander Governments have passed legislation or regulations actually forbidding the utilities from going ahead with the siting or location of nuclear power stations at particular points.

Dr. M. S. Miller: Is my hon. Friend aware that there were similar demonstrations in France a couple of years ago?

Mr. Hooley: Yes, I am aware of that, but they were not quite of the scale or ferocity of those in West Germany in recent months.
I do not know whether there is evidence that public opinion and feeling on the siting of nuclear power stations is leading to a general reappraisal of energy questions in Western Europe. But certainly it would be very odd if the meeting that my right hon. Friend is chairing next week did not include some comments by the Federal Republic about the growing


social strains that a big programme of nuclear power stations would undoubtedly put on the societies of Western Europe. I am not saying that we are reaching crisis point—far from it. However, there are straws in the wind.
Then there are the related international problems. There have been diplomatic tensions between the United States and Germany about the contract with Brazil and between the United States and France about the contract with Pakistan. Clearly, this development will play a part in the international discussions on energy policy.
At the beginning of the debate the Secretary of State did not say much about non-conventional sources of power in the European context. France is the only West European country actively to experiment with tidal power, yet this country has almost unique potential in that field in the Severn Estuary, and possibly elsewhere. Also, the American Administration is becoming more and more interested in solar power and wind power and I wonder whether this interest is reflected in any way in the evaluation of power sources by the EEC. Is it thinking in these terms? If so, perhaps it could do so with a little more vigour, drive and imagination and retreat a bit from the state of passionate attachment for nuclear power which followed the oil crisis.
My right hon. Friend referred to the JET programme. I must confess that as a layman I am a little cynical whether that will ever eventuate. Equally, as a layman, I regard it as an important scientific and engineering undertaking. It will be disastrous if we continue to dither over this matter in Western Europe because of a silly quarrel over whether the project should go to Northern Italy or Culham. All my reading on the subject leads me to believe that the expertise concentrated at Culham gives that area a far greater claim on the project. I hope that my right hon. Friend will press the claim.
This is not a general debate on energy matters in the conventional sense, and I shall not explore other aspects of the problem. I was glad that my right hon. Friend the Secretary of State for Energy extended the debate from the technical consideration of coking coal. I hope that at the end of this debate he will

find it possible to say a little more about some of the other matters that have been mentioned.

9.47 p.m.

Mr. Peter Hardy: I shall not follow the remarks made by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) too closely, although he struck a chord in my mind when he mentioned coal discoveries in Australia. No doubt those discoveries received a great deal of attention in the British Press. Too often substantial and valuable discoveries of coal in and around Britain have been dealt with in a muted fashion. We have been modest about the tremendous discoveries of coal obtained in Britain in recent years. My hon. Friend was right to say that we should look upon ourselves not as an energy island but as part of the wider world. Therefore, we should not take too modest a view of our potential.
The hon. Member for Arundel (Mr. Marshall) tried to take the wider view and, interestingly, began his remarks by suggesting that he had begun his life in a coke oven. The odd whiff of sulphur can still be discerned since the hon. Gentleman now occupies a place on the Conservative Benches. He is certainly one hon. Gentleman on that side of the House who knows something about steel and coal, since he had an association with South Yorkshire before he decided to seek the more salubrious pastures of Arundel. I am glad that he has not forgotten us. I welcome his views and his thoughtful questions to the Minister.
It is interesting to note that the hon. Member for Sheffield, Hallam (Mr. Osborn) is not now with us, but I heard his speech with interest. I only wish that when I opposed him in an election in 1966 I had striven a little harder, so that I could have joined my hon. Friend the Member for Heeley rather earlier on the Labour Benches. However, I wish to congratulate the hon. Gentleman since it is the first time I have seen him at the Dispatch Box.
I am in the fortunate position of having in my constituency both steel and coal interests. I was interested to hear the remarks of my hon. Friend the Member for Brigg and Scunthorpe (Mr. Ellis), who has worked very hard to master the needs and problems of his area. I hope


that he will see the extension of iron-making which his constituency needs. Some of the pits in my constituency produce coking coal. Therefore, I welcome the European commitment to provide long-term support for coking coal.
The one anxiety about the document that is before us relates to the situation in West Germany. West Germany exports a great deal of coal to other member States. I am not sure whether all the coal that it exports—whether it is regarded as coking coal or semi-coking coal—is used for purposes for which coking or semi-coking coal ought to be used, but West Germany certainly exports a great deal and makes a lot out of it. West Germany is able to export that fuel because it imports large quantities of coal for steam-raising purposes from Poland, a little from South Africa and perhaps some from America and elsewhere.
West Germany produces a lot less than we do but exports and imports more. To some extent it is in the same position as we may be in with offshore oil by the 1980s. Our oil is valuable and ought not to be used for more base purposes. We should make a profit by exporting some of our good oil and importing, in its place, some oil at a much lower price. We could therefore make a profit, and I see no objection to that.
The Germans have been applying that policy to coal for a considerable time. I hope that as the National Coal Board gains in confidence as a result of the Government's policies—and the Government have certainly contributed to growing confidence in the industry—it will be able to enter into commitments and to seek markets to an extent to which it has not been able to do so before.
In so far as the Community's arrangements make that possible and encourage it, that policy should be pursued. If the European arrangements do not encourage it, I suggest that they should, since we have hundreds of years of reserves of coal, far more than anyone else in the Community. I know that the Minister is seeking to ensure that Europeans are aware of British potential.
I congratulate the Secretary of State on his approach tonight in seeking to widen the debate. I know that some

Opposition Members took a cynical view of the Minister's attempt to broaden the energy debate when the National Energy Conference was held near the House a few months ago. It is right that the open debate that the Minister is seeking should be open not only in Great Britain but within Europe and in the wider context that the hon. Member for Arundel and my hon. Friend the Member for Heeley advocated.
I hope that we can raise our sights a little beyond the subject of coking coal to 1985. If we can do so, Europe and Britain will be widely and well served. We have the potential and the capacity to promote the interests of Britain and the coal industry by seeking to embellish and embroider the narrow point discussed in the document.
I congratulate the Secretary of State on his approach. The opportunities that are open to Britain are quite considerable, and benefits are available not only for Britain, but on a much wider basis. As a result of "Plan for Coal", during the last three years we have had a capacity and an embryonic confidence that can serve Britain and Europe well.

9.54 p.m.

Mr. Benn: With the leave of the House and yourself, Mr. Speaker, I shall briefly speak again. This has been a useful debate. One thing that has emerged is that one can start on what may appear to be a narrow matter, but immediately a whole range of interests can be brought in—I refer to industrial interests, not to a large number of hon. Members.
I congratulate the Scrutiny Committee on having done better than the European Assembly in identifying what is really involved in the matter. It certainly confirms my policy, to which my hon. Friend the Member for Bother Valley (Mr. Hardy) referred, of opening everything up so that nothing goes through on the nod without the subject and its implications being discussed.
The hon. Member for Sheffield, Hallam (Mr. Osborn) asked what had happened to the money. The recycling of the money from the Treasury to the BSC has stopped because of objections from the Commission. The contributions paid to the Treasury would go across the exchanges to the Commission only in the event of


the new scheme, which has not been fully worked out, coming into existence.
My hon. Friend the Member for Birmingham, Erdington (Mr. Silverman) spoke on behalf of the Scrutiny Committee and rightly read the BSC letter in full. Without his Committee, the BSC case would not have come before the House. The criticism of the BSC that my hon. Friend reflected when he read the letter is important.
The hon. Member for Arundel (Mr. Marshall) asked some questions with which I can deal quite quickly. There is full consultation with the Department of Industry on wider problems of co-ordination. It is no secret that there is a Cabinet committee on energy. This must have been widely assumed by the House. All relevant Ministers are on the committee and its work covers a wide range of ministerial interests. As a former Secretary of State for Industry, I have seen the committee's work from both sides and I can assure the hon. Member for Arundel that the interests of the BSC are fully reflected there.

Mr. Michael Marshall: Some of us are looking to the right hon. Gentleman with his experience to do a useful job in the short time that remains before the end of this Government's term of office. Is the idea of product specialisation—the method by which one European steel manufacturer makes one product and another a different product—considered in the committee, and does it also look at the possibility of exporting coking coal?

Mr. Benn: I agree that the two and a half years that remain to the Government is a short time for consideration of the matters to which the hon. Gentleman refers. In saying that there is consultation and co-ordination in Whitehall I must not purport to speak for my right hon. Friend the Secretary of State for Industry on steel policy within the Community, although I was involved in that at one time.
I am sorry that my hon. Friend the Member for Brigg and Scunthorpe (Mr. Ellis) did not find it easy to get hold of the BSC letter. It was made available to me as a Minister and was put in the Library. In the last Bill considered by the House this evening I noticed the provision

for Ministers to make available to hon. Members copies of certain briefs. I cannot promise to do that on every occasion, but I see no reason why Back Bench Members should have difficulty in getting access to documents. I shall look at this point to see whether the House can be better informed.

Mr. John Ellis: It would have been helpful if the BSC letter had been appended to the report and put in the Vote Office. The Committee does not always send its documents to the Library.

Mr. Benn: This is a matter for the Scrutiny Committee. I find it difficult to keep abreast of all documents without the assistance of my Department, and I see no reason why a Minister should have at his disposal information that ought to be at the disposal of all hon. Members. If I can help in this matter, I shall.
My hon. Friend the Member for Brigg and Scunthorpe also asked me to see that his views and criticisms, which were very much the criticisms of the BSC, were expressed in the Community. I shall do better than that for him. I shall see that copies of the Hansard report of this debate are made available to other Ministers in the Community so that they can be aware of the interest shown in the debate.
My hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) raised wide-ranging issues about the best balance of advantage. It is difficult to answer him because in the Community legislation has been worked out by bargaining and this form of legislation is not familiar to the House—at least, not until recent events. I shall not go into these matters, because tact all round may be advisable.
It is very unusual for hon. Members, brought up in the tradition of examining every case on its merits, to find that the Community operates in quite a different way. It is not for me to range as broadly as my hon. Friend, but he raised the problem of nuclear energy in the Community. There is no doubt that when I went on my tour of capitals other Ministers expressed considerable anxiety about—

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That the Representation of the People Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Bates.]

EUROPEAN COMMUNITY (COKING COAL)

Question again proposed.

Mr. Benn: My view is that the Community could and should discuss problems which are common to every member State. There is great anxiety about how to handle the nuclear question. I read the papers, as do all hon. Members, and I note the events in other countries. We have tried to do things differently with regard to nuclear policy. We have not in any way lost by having discussions which, by their openness, have defused anxiety.

Dr. M. S. Miller: Does my right hon. Friend agree that, despite those anxieties, before the other exotic methods described by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) come into play there will be a period in which it will be essential for nuclear energy to be used?

Mr. Benn: I have never denied the rôle of nuclear energy. Over many years I have been responsible for nuclear policy —I think from 1966—and have played some part in it. I think that nuclear power, the new realisation of its possible impact on civil liberties and the question of the fast breeder, which is separate from the thermal system, are proper matters for discussion. They should not be reduced to a conflict in the streets without proper examination by those concerned. I make no apology for doing that. On the whole, our handling of this difficult question will be the better for it.
Mention has been made of non-conventional methods of energy and benign sources. Solar energy and geothermal methods are being considered. Indeed, the Severn barrage is due for proper examination in view of the possibilities there.
My hon. Friend the Member for Rother Valley concluded his speech with some kind references to me. My hon Friend's twin interests in steel and coal are interests which any British Minister is

bound to have in mind when he goes to the Energy Council.
I have made it absolutely clear tonight —I want no one to be in any doubt—that the extension of the coking coal scheme, together with these other proposals which are being aired, the way in which they will be financed and the transfer of money across the exchanges, poses real difficulties for the British Government. I hope that the House will allow me to go forward with at any rate a broad scope of British interests in mind to see what may best be achieved at the council meeting.

10.3 p.m.

Mr. Tom King: Briefly, I think that what this debate has brought out is the tribute paid by the Secretary of State to the Scrutiny Committee for its work. The right hon. Gentleman criticised the work of the European Parliament as being less effective in this respect.
The point made by the hon. Member for Brigg and Scunthorpe (Mr. Ellis)—that without the requisite information he had difficulty in being fully informed on the attitude of the British Steel Corporation—is a weakness and problem for the European Parliament. The Secretary of State said that he was overwhelmed with paper and found it difficult to get all the right documents. I should have thought that it was possible for him to respond to his hon. Friend's proposal that the correspondence from the BSC should have been attached to the document. That would have been most helpful. That was not a very demanding request. Such information would have added to the quality of the debate.

Mr. Benn: I think that that is a matter for the Scrutiny Committee. I did not want to appear to be arguing about what it should do. If there is thought to be inadequate information available when a matter comes up for discussion, I should certainly wish to fill that gap. Incidentally, the hon. Member for Sheffield, Hallam (Mr. Osborn) said that it was difficult for the European Assembly to get access to the documents. I was using that as an argument for greater openness within the Community. I think that we in this House are getting more information.

Mr. King: We may be arguing about no real disagreement in this respect. As has been stated, the effectiveness of our


representatives in the European Parliament was undoubtedly reduced by the fact that they were not aware of the BSC's attitude, which was obviously very significant.
The least attractive aspect of the debate is the "What is in it for us?" attitude which can easily occur on European matters. We are dealing with a possible subsidy and payment across the exchanges of perhaps £2 million a year. My hon. Friend the Member for Arundel (Mr. Marshall) pointed out that a very substantial sum is coming from Europe to underpin the BSC's capital investment programme by £246 million. That is a very substantial figure.
I welcome the new approach of the Secretary of State in not jumping on each individual issue but recognising that if he is to discharge his responsibilities, not merely as Chairman of the Council of Ministers but as the United Kingdom representative, there is an obligation in this instance to recognise the need for an element of give and take in these issues.
I find the scheme somewhat weird. The original scheme was particularly weird in the sense that it was a straight transfer out and transfer back again. There must be ground for wondering whether the steel industry should be involved at all and whether this is not a straight subsidy to coking coal production that should be treated as such.
I was also interested to hear the Secretary of State say that, because of the remarks made by one of his hon. Friends, he would ensure that copies of Hansard containing tonight's debate would be circulated to the Council of Ministers. As soon as the Secretary of State began his speech, I had already earmarked it for circulation in the Council of Ministers. I thought that the right hon. Gentleman was marking out his negotiating position. Even if his hon. Friend had never opened his mouth, I think that the Secretary of State would have ensured that copies of Hansard were on their way to Europe as soon as they came from the printers.
We also welcome the new communautaire spirit of the Secretary of State, on which I have remarked before. Presumably this is an attempt to turn himself into a great European Chairman of the Council of Ministers. We shall be

very interested to see what will happen in the very limited time available to him. We realise the state of desperation that the Government are in when we see that the Secretary of State had to go all the way to Somerset to appeal for unity in the Labour Party. We realise the extent of the distress which his party is in.

Mr. Benn: I remind the hon. Gentleman that the South-West of England is the only region where 50 per cent. of the Labour Members of Parliament are in the Government. That is the highest percentage in the whole country.

Mr. King: I recognise that, but if the right hon. Gentleman did his homework he would know that the South-West is also surprisingly well represented on the Opposition Front Bench.
While on the subject of the Secretary of State's communautaire approach, may I say that his last speech but one was made in my constituency, in Bridgwater, when he presented a medal to the Labour agent. He said in his speech that he was delighted to be there because it meant that he would not be attending a meeting of Community Energy Ministers, and that if that meant that he was holding up the Community's energy policy he thought that he and the recipient of the medal would be equally pleased. We can contrast that with his present enthusiasm for pushing forward Community energy policy.

Question put and agreed to.

Resolved,
That this House takes note of Commission Document No. R/2639/76 and of the comments in the Fourth Report of the Select Committee on European Legislation, &amp;c. but is mindful that the proposal is only one of several aimed at providing long term security of Community energy supplies which as a whole are likely to be beneficial.

REPRESENTATION OF THE PEOPLE BILL

Considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

PETITION

Disabled Persons (Mobility Allowance)

Mr. Douglas Henderson: I beg to submit a petition, Mr. Deputy Speaker, signed by 2,205 of my constituents and submitted in the name of Miss June Finnie of 6, Union Grove, Fraserburgh. Miss Finnie is disabled and has gone to considerable trouble in arranging to collect these signatures. Their significance will become apparent when I mention the purpose of the petition.
That purpose is to draw the attention of the Secretary of State for Social Services to the policy on mobility allowance for the disabled. The petitioners are greatly concerned that the present policy
removes the assurance of continued independent mobility from those severely disabled persons now driving invalid tricycles, and condemns many new applicants for mobility assistance to be housebound as a result of the inadequate level of the mobility allowance.
The petitioners therefore call upon the Secretary of State to promote policies which will carry out the following purposes: first, to guarantee immediately
the right of continued independent mobility to current invalid tricycle drivers when the supply of tricycles is exhausted;
Second, to restore immediately
the option of a suitably adapted car or invalid tricycle to new applicants for mobility assistance under the powers granted to the Secretary of State.
Thirdly, it urges him actively to
promote projects to design and produce specialised vehicles which will enable an increasing number of severely disabled people to enjoy independent mobility.
Further, the petitioners pray that the House shall
take all the necessary steps to promote a total policy on mobility which will ensure that choice is available to the severely disabled between a mobility allowance set at a level which will enable purchase and maintenance of appliances that they need and the issue of a specialised vehicle.
The petition concludes in the customary way with the words
And your petitioners, as in duty bound, will ever pray.

To lie upon the Table.

HEALTH SERVICES (NORTH-WEST REGION)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]

10.14 p.m.

Mr. Cyril Smith: I seek to raise in this short debate the needs of the National Health Service in the North-West. I do so on the basis that it is necessary to make sure that the Government are aware of the needs of the Health Service in the North-West, and are deeply conscious of and ever mindful of them. I want to ensure that the Government are fully aware that hon. Members on both sides of the House who represent the North-West will be ever vigilant in ensuring that the region receives its proper share of the available cake.
I use the word "proper" quite deliberately, because I believe that it is necessary to have regard to need as well as to population, to history as well as to the future, and to actual conditions as well as to statistics. It would appear to be clear in terms of the 1977–78 revenue allocations that the Minister has understood our special needs. I want to place on record my appreciation of that fact. But I warn the Minister that North-West Members take this merely as a declaration of long-term interest and intent and not as an end in itself. Even though we have had the highest percentage increase over the present year of any region in the country, we are still at the bottom of the league table, and we need, certainly for the whole of the foreseeable future, to maintain that fairer distribution, based on the real need which the Government have at last recognised.
I know that the Minister has already seen something of the hospitals in the North-West and I hope, should be in office long enough, that he will come and see us again to see our deprivation, to realise how beneficial the implementation of the Resources Allocation Working Party Report, "Sharing Resources for Health in England", will be to the region, and to appreciate how essential it is that that report and its recommendations should be implemented. The report talks of deprived regions and clearly demonstrates that the North-West is one of them. But I believe—and this is one of


my reasons for securing this debate—that the facts should be brought out in the open and put on parliamentary record.
My constituency is one of the towns in that part of the country which, whilst having undeniable attractions—for example, Rochdale, has me as its Member—owe much of their urban development to the Industrial Revolution. To date, Rochdale still bears the scars of that period, and the heritage affects many buildings, including hospitals. The people of my constituency, and certainly their predecessors, bear the scars and wounds of the Industrial Revolution and have thus contributed to the economic wealth of the country far out of proportion to their number. We now want some of that cake returned to us.
Our hospitals, whilst doing a wonderful job, need vast sums of money spent on them. Better still, we could do with new ones to replace many of them. In 1974 the Strategic Plan for the North-West, prepared by the North-West Region Economic Planning Council, concluded:
The general quality of life in the Region as a whole as measured by pollution, housing, health and education, appears to be distinctly poor and often inferior to that of any other English Region …it is clearly in need of considerably more effort if it is not to be left further behind other Regions.
If one lives in the North-West one's expected life span is two years shorter than the average for England and Wales. One is more at risk of certain diseases throughout the whole of one's life. The death rate from coronary heart disease per 1,000 men between the ages of 45 and 64 is 4·92 in England and Wales, but only one of the 18 districts in the North-West Region has as low as that figure and the rest have figures significantly higher.
The death rates for diseases of the circulatory system or the respiratory system, for cancer, accidents, poisonings and even violence are all significantly higher in the North-West than the average for England and Wales.
Against that background one might have thought and, indeed, expected that the region would have had a larger proportion of the resources available allocated to it, but until this year that has not been the case. For years we have been the poor relation. Forty per cent. of our hospitals were built before 1900.
Indeed, 8·5 per cent. of them were built before 1850. Only 18·2 per cent. have been built since 1948. To do all the replacing of inadequate buildings that is necessary we should need about £400 million, and, even acknowledging, as I do, that much needs to be done in the country as a whole, it is stated in the working party report that the shortfall in the North-West even equitably to distribute the total national stock of hospitals is £75 million.
Even statistics of that kind in no way paint the real picture of inadequate sanitary facilities, of cold and draughty building, of lack of space needed for new equipment, of appalling waiting conditions for out-patients, and of cluttered corridors. These are factors and features of many of our North-Western hospitals. As I say, those features are not painted by cold statistics, and yet the conditions are well known to staff and patients.
These conditions make it difficult to attract staff. My own area, Rochdale, has, I understand, advertised three times for anaethetists and radiologists without response. I am told that in Salford it is two and a half weeks since a patient could be admitted from the medical emergency list. We are worse off in the North-West than in the country as a whole for laboratory technicians, occupational therapists, pharmacists, and physiotherapists. At present there are 57 consultant posts in the North-West Region which have been approved by the DHSS but which it has proved impossible to fill. In answer to one of my recent parliamentary Questions the Minister agreed that the North-West had a smaller number of general practitioners per 100,000 population than any other region; 44·7 is the average for the country but we have only 42.
The Resources Allocation Working Party postulated target allocations for each region in relation to revenue allocations for 1976–77. That chart assumes a figure of 100 per cent. for target allocations. The North-West region is below that at 80 per cent., again the lowest of any region. Five regions, including four metropolitan regions, are already above 100 per cent.; indeed, two have reached almost 120 per cent. That proves that patients in this region have been forced to accept lower standards of care, and that is what hon. Members from the


North-West have been saying for many years, long before I arrived here.
It for all those reasons, and time forbids my saying more, that I make this strong plea for continued priority allocation to the North-West. Although the North-West may be further from London than some of those whose bleatings about this matter have become known to us recently, I assure the Minister that we feel just as strongly about these matters.
I am not asking for favoured treatment for the North-West, but for fair treatment. For 30 years the Health Service has been unfair to the North-West in terms of allocation of resources. I am aware of the plea in some quarters for a recognition of the so-called centres of excellence. I do not object to such centres, but I cannot see why they should be so heavily weighted in London or to London. There should be a more equitable distribution throughout the country and the cost should be met from the overall financial allocation to each region based on the working party's formula. I hope that the Minister will resist any pressure to give extra money to London at the expense of the regions, on centres of excellence grounds or other grounds.
I realise and recognise that past wrongs cannot be put right overnight. What worries and concerns me is the possible development of the attitude that, because of a particular shortage of resources at this time, we must hasten slowly to redress past unfair balances. That I reject entirely. Now is the time to act. I am grateful that the Minister has done so this year, but let him or any of his successors, whoever they may be, whenever they come to power, clearly understand that this redressing must continue. Nothing less will satisfy us and nothing less will be fair.
Whether or not they are short, resources should be most carefully directed to the areas of greatest need. For the Health Service the areas of greatest need are in the North-West. I hope that that will not be forgotten or overlooked by this or any other Government.

10.25 p.m.

Mr. James Lamond: I congratulate the hon. Member for Rochdale (Mr. Smith) on his initiative in rais-

ing this matter in an Adjournment debate, because it is a source of concern to Members who represent North-West constituencies, as can be seen from the attendance in the Chamber. Although the Chamber is not overcrowded, there are more Members present than is normal for an Adjournment debate. I see present my hon. Friend the Member for Middleton and Prestwich (Mr. Callaghan), my hon. Friend the Member for Stockport, North (Mr. Bennett) and the hon. Member for Colne Valley (Mr. Wainwright), who I am sure considers himself to be in this region for National Health Service purposes.
I worked in the Health Service in another part of the country for 16 years before I came to this House. I was astonished and dismayed when I saw the facilities that were available for my constituents in Oldham, and I have since discovered that that is true of almost the whole of the region.
I suggest to my hon. Friend the Minister of State that he considers throwing his weight behind the plea that we have made that this whole matter be thoroughly aired in the Standing Committee on Regional Affairs. When we were invited by the Chief Whip to suggest subjects for discussion, that is one that the Labour Group put forward. There are many hon. Members who wish to put points additional to those made by the hon. Member for Rochdale, and I hope that my hon. Friend will bear this in mind when he is approached about the possibility of having such a debate.

10.26 p.m.

The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): As my hon. Friend the Member for Oldham, East (Mr. Lamond) said, this is a well-attended Adjournment debate. There was a similar well-attended Adjournment debate when we discussed the application of the Resource Allocation Working Party's Report to London. I think that I was able on that occasion to explain the situation to hon. Members, and I hope that tonight I shall be equally successful in respect of the North-West. I hope to reassure all my hon. Friends and those who have raised this subject that the National Health Service needs of the North-West Region have been and will continue to be carefully and even


generously considered within the constraints of the prevailing economic situation.
I agree with the hon. Member for Rochdale (Mr Smith). My right hon. Friend and I fully recognise that the North Western Regional Health Authority is deprived and under-provided compared with other regions in England. In the basic matter of physical resources the North-West Region is at a disadvantage in having a large number of old hospitals in poor condition. A recent national survey in England and Wales of hospital property showed that 56 per cent. of hospitals in the old Manchester Region were built between 1850 and 1918, whereas the national average is just over 41 per cent. Matters were not improved when the one new hospital built during recent years, at Crewe, in the old Manchester Region was transferred to Mersey Region following reorganisation in April 1974.
In addition, figures produced in the 1975 annual report of the North-Western Regional Health Authority show that the region is clearly not one of the healthiest places in the country in which to live. Its population has a higher proportion of those age groups which place the greatest demands on the health services—the under 15s and over 65s. The general mortality rate is higher in the North-West than in England and Wales. The 1974 figures show 13·3 deaths per 1,000 population in the North-West as against an average of 11·9 in England and Wales.
The region still has an unacceptably high rate of infant and perinatal mortality—that is, still-births and deaths under one week—and further data derived from the Registrar General's Statistical Review show that the North-West has a greater proportion of sufferers from bronchitis and cardiovascular disease than in the country as a whole.
To add to these problems, the region is also poorly served in terms of numbers by professional, medical, paramedical and other staff in health-related professions—that is, dentists, chiropodists, physiotherapists, occupational therapists, audiologists and general practitioners. At October 1975 the average patient list size of general practitioners in the North-West was 2,459, against an average of 2,365 for England as a whole. Given this rather sombre picture, the obvious ques-

tion is why, if this is the extent of the problem, something has not been done about it before. I cannot say why nothing has been done before, but what I can say is what is now being done to improve matters under this Government.
Successive Governments have faced the problem of eliminating inequalities in health care provision, in the North-West Region and elsewhere, against the background of rising demand and limited resources. In 1971 the Department introduced the Crossman formula, when the Department was headed by the late Richard Crossman. By this formula the relative need of regions for revenue funds for hospital services on the basis of population, beds and cases, was judged. This confirmed an already well-known fact, and the Manchester Region was assessed as being needy, although not by any means the most needy region.
In 1976 we developed a more sophisticated technique in that we received the report of the Resource Allocation Working Party, to which the hon. Gentleman has referred, dealing with the allocation of health resources among the various areas and regions of England. The working party was made up of representatives of health authorities and the Department, and had been set up to advise Ministers on the principles and methods for allocating capital and revenue resources to National Health Service authorities on as objective and fair a basis as possible and according to the health care needs of their populations. Here again the Committee recognised the principle of fairness. The hon. Gentleman was keen to argue that principle. He said that he would argue the case of fairness in deference to favoured terms for the North-West. I have a feeling that he could well have argued a case for discrimination in favour of the North-West without deserting sound ground.
The result of this report was that my right hon. Friend confirmed on 21st December last the Government's long-term commitment to a fairer allocation of money between different regions. He also said that, having considered the views of the National Health Service authorities and other interested bodies consulted in the report, he had accepted the recommendations of the working party as a basis for distributing resources for 1977–78.
What this means is that we have a much more sophisticated instrument for judging how resources should be distributed around the country. The principal innovation in the criteria proposed for judging the health care needs of populations compared with the previous formula is the introduction of standardised mortality ratios for diseases as a proxy indicator of relative health care needs.

Mr. John Roper: My hon. Friend has referred to the fact that in terms of the long-term needs of the North-West he will be moving to a fairer allocation. For my constituents and those of my hon. Friends present tonight, some of whom are likely to die sooner in the North-West than people in any other region, long-term is not soon enough. We are anxious to see something in the immediate future to make sure that there is a fairer deal for the North-West.

Mr. Moyle: I quite understand my hon. Friend's impatience. He will realise that we are living in a time when the economic climate is such that the new funds coming into the Health Service are not substantial. It is fair to say that other people in the rest of the country are also entitled to their health services. The record of this Government in this matter is better than any of their predecessors.
I was coming to a rough English translation of the formula I have given from the Resource Allocation Working Party which involves the use of death rates, roughly speaking, as an indicator of the health needs of an area, weighted for age and sex. The application of these mortality ratios to the population of the North-West health region shows it to be in greater need of health care than hitherto indicated.
The result of that is that the region will continue to receive one of the highest rates of real terms additions. There is no doubt, and there is no point in trying to dodge the issue, that the equalisation will take time. What is not realised is the need for careful planning to effect the necessary rationalisation of services in the deprived areas without putting important activities and institutions at risk elsewhere. We cannot achieve equalisation overnight, particularly in a situation

of low growth nationally. Such a step would involve taking millions of pounds from the richer regions, and if it were done too quickly it would damage patient services, jeopardise the national medical student programme and destroy centres of medical excellence.
All this might be done without achieving a commensurate properly planned build-up of services in the relatively deprived regions such as the North-Western to receive and utilise the extra resources. The policy at this stage, therefore, is primarily concerned intra-regionally with the disbursement of new money coming into the Health Service.
The Secretary of State has recently notified allocations to regional health authorities and, as the hon. Member will know from my Answer on 8th March, the North-Western Region received an increase in its revenue allocation of approximately 3·2 per cent. in real terms, and that is more than twice the national average.
In deciding allocations for 1977–78 my right honourable Friend has taken a middle course between the desire to move as quickly as possible to a fairer distribution of resources among health regions and the need for some room for manoeuvre in the relatively well endowed regions. These latter regions, like other regions, are having to meet the needs of an ageing population—the national number of people over 65 increases by about 1 per cent. a year—but, above all, they have to continue the major redeployment of hospital services needed to release resources for other uses, particularly the build-up of the community health services in the inner city areas.
These regions need more time for manoeuvre, but it should be recognised that growth of a fraction of 1 per cent.—which is what the Thames regions have received this year—really represents an absolute cut in a region's ability to meet the growing demand that arises from demographic change. We are dealing with matters as quickly as we can.
The middle course I have adopted in no way conflicts with the recommendations of the working party: RAWP has not been "put on ice", neither have its recommendations been diluted, and I have fully adopted the working party's recommendations for revenue allocations for this coming financial year. I hope


that this statement will give the honourable Member the reassurance he and others in the North-West may have been seeking. It is not generally understood that the working party did not recommend the actual level of allocations for 1977–78 or future years. Its recommendations are largely directed at establishing a target allocation towards which at all levels of the Health Service authorities' actual allocations should gradually be moved.
The extent to which movement is possible in any one year depends on a variety of factors. It is essentially a judgmental process and takes into account the additional resources available, local circumstances, and factors which at the moment cannot be objectively quantified in the formulae for resource distribution as recommended by the Resource Allocation Working Party.
Another new feature in the revised arrangements for the allocation of revenue funds is the institution of a separate identified allowance styled as the "service increment for teaching"—or SIFT. This is designed to meet the additional cost to the NHS of the provision of clinical teaching facilities for the training of medical and dental undergraduate students. There is an increasing number of these institutions in areas outside London. Therefore, this concept is of use to them.
This allowance will be a significant protection in the allocation of the North-Western Region which has a rapidly increasing number of medical students. I understand, in fact, that the University of Manchester has now one of the largest medical schools in Europe. I recently accepted the invitation of the vice-chancellor of the university to visit the medical school in the near future.
The North-Western RHA has a plan for the development of health services in its region over the next 10 to 15 years. Its plan indicates where the present shortages in provision lie and sets out certain basic aims and ways to improve the situation. Already some steps have been taken. Two new major hospitals, one a teaching hospital, are now being built—one at Preston and one at Salford. Similar advances have been made in providing health centres in the region. At 31st December 1975 there were 67 such centres in the region, an average of 1·67 per 100,000 total population against an average of 1·36 per 100,000 total popula-

tion in the country as a whole. Training facilities for staff are also being improved with the hope that staff who train in the region will settle and practise there. That is a general experience that we have discovered.
In addition to the undergraduate medical schools, the region also has a dental school in Manchester, and dental training is an important function of that teaching area. Training for the rehabilitation professions is provided in Salford teaching area and a new degree course for speech therapists is now in existence at Manchester University.
In the North-West divided into health areas services are managed at area level and within areas and districts. We cannot discuss the services in the North-West just in terms of the levels of allocations to the regional health authority. The services within the region are patchy, just as in other regions. Redressing these inequalities among areas and districts are decisions for the regional health authorities themselves. It is now up to them to go ahead and do so.
Guidance on how best this might be done has been issued by my right hon. Friend, but I do not expect to see great amounts of revenue moneys next year switched between areas and districts, although I hope that some limited movement will be possible. There is clearly a maximum rate at which resources can sensibly be increased or diminished without damage to important services and without insupportable organisational strain. This does not mean that economies and rationalisation will not take place. They may, but they will not in the main relate to the redistribution of resources between areas under the Resource Allocation Working Party's formula.
The object of this whole exercise is to see the national resources of this national service evenly distributed so that we have a truly national service and that the population in the North-West has the same opportunity for access to health care as those in the so-called rich regions in the South-East.
My hon. Friend the Member for Oldham, East suggested that this might be a suitable topic for discussion in the Regional Affairs Committee. That is obviously not a matter on which I can take a decision, but I am sure that the attention of the Leader of the House will


be drawn to my hon. Friend's suggestion and it is to be hoped that we shall be able to have such a debate. I would certainly co-operate in any arrangement.
I have spent a great deal of my relatively short time at the Department of Health and Social Security looking at events in the North-West. I have been there about half-a-dozen times and I have

a couple more visits lined up to look at the problem. I can assure hon. Gentlemen that I am pursuing this problem against a background of trying to inform myself as fast as possible of the actual technical problems in the region.

Question put and agreed to.

Adjourned accordingly at seventeen minutes to Eleven o'clock.